EXHIBIT 10.3
SEARS, ▇▇▇▇▇▇▇ AND CO.
LICENSE AGREEMENT
H&R Block Services, Inc.
June 30, 2004
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Effective Date
195-014
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Finite
TABLE OF CONTENTS
1. GRANT OF LICENSE.......................................................... 7
1.1 License for On-Premises Operations................................. 7
1.2 No Representations................................................. 8
1.3 Licensee's Franchisees............................................. 8
2. TERM ..................................................................... 9
3. USE OF SEARS MARKS........................................................ 9
3.1 Licensed Business Name; Other Communications....................... 9
3.2 Use and Registration of Licensed Business Marks.................... 9
3.3 Prosecution of Claims Relating to Licensed Business Name........... 10
3.4 Rights of the Parties.............................................. 10
3.5 Injunctive Relief.................................................. 10
3.6 Infringing Use..................................................... 10
3.7 Good Will.......................................................... 11
3.8 Survival........................................................... 11
4. SEARS FEES................................................................ 11
4.1 Amount............................................................. 11
4.2 Net Sales.......................................................... 12
4.3 Gross Sales........................................................ 12
5. OPERATIONAL OBLIGATIONS OF LICENSEE....................................... 12
5.1 Operational Standards.............................................. 12
5.2 Hours of Operation................................................. 13
5.3 Pricing............................................................ 13
5.4 Discount Policy ................................................... 13
5.5 Customer Loyalty Programs ......................................... 13
5.6 Customer Adjustment/Service ....................................... 13
5.7 Employee Standards................................................. 14
5.8 Licensee's Employees............................................... 14
5.9 Employee Compensation.............................................. 15
5.10 Compliance with Labor Laws......................................... 15
5.11 Compliance with Law................................................ 15
5.12 Payment of Obligations............................................. 15
5.13 Licensee's Obligations............................................. 16
5.14 Liens.............................................................. 16
5.15 Licensee Audit Program............................................. 16
5.16 Preparer........................................................... 16
5.17 Preparer's Responsibilities. ...................................... 16
5.18 Licensee's Guarantee to Customers.................................. 16
5.19 Quotation of Charges............................................... 17
5.20 Copies of Tax Returns; Taxpayer's Files............................ 17
6. LICENSED BUSINESS AREA.................................................... 17
6.1 Locations............................................................. 17
6.2 Additional Locations............................................... 19
6.3 Improvements....................................................... 20
6.4 Commencement of Operations......................................... 20
6.5 Condition of Licensed Business Area................................ 20
6.6 Changes of Location/Remodeling. ................................... 20
6.7 Electric/HVAC...................................................... 21
6.8 Telephone Service.................................................. 21
6.9 Telephone Numbers.................................................. 22
6.10 Telephone Directory Listings....................................... 22
6.11 Access to Licensed Business Area................................... 22
6.12 Effect of Store Leases............................................. 22
6.13 Waiver of Premises Liability. ..................................... 23
7. PUBLIC COMMUNICATIONS..................................................... 23
7.1 Advertising......................................................... 23
7.2 Other Publicity..................................................... 24
7.3 Forms............................................................... 24
8. LICENSED BUSINESS EQUIPMENT............................................... 25
8.1 Licensee's Equipment................................................ 25
8.2 POS Terminal Provided by Sears...................................... 25
8.3 Licensee-Provided POS Terminal...................................... 25
9. TRANSACTIONS AND SETTLEMENT............................................... 25
9.1 Checks.............................................................. 25
9.2 Credit Sales........................................................ 25
9.3 Transactions........................................................ 27
9.4 Settlement.......................................................... 28
9.5 Reports............................................................. 28
9.6 Audit Rights........................................................ 29
9.7 Underreporting...................................................... 29
9.8 Rights of Recoupment and Setoff .................................... 30
9.9 Check Cashing....................................................... 30
10. CONFIDENTIALITY; CUSTOMER INFORMATION..................................... 31
10.1 Confidential Business Information................................... 31
10.2 Treatment of Confidential Business Information...................... 32
10.3 Exceptions to Confidential Treatment................................ 32
10.4 Confidential Customer Information................................... 33
10.5 Treatment of Confidential Customer Information...................... 33
10.6 Post-Termination Obligation......................................... 34
11. RELATIONSHIP OF PARTIES................................................... 34
12. DEFENSE AND INDEMNITY..................................................... 34
12.1 Defense............................................................. 34
12.2 Indemnity........................................................... 36
12.3 Survival............................................................ 37
13. INSURANCE................................................................. 37
13.1 Types of Insurance .................................................. 37
13.2 No Cancellation Without Notice/Excess Coverage....................... 38
13.3 Certificates......................................................... 38
13.4 Expiration/Non-Renewal............................................... 38
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13.5 No Waiver............................................................ 39
14. TERMINATION............................................................... 39
14.1 Mutual Right of Termination.......................................... 39
14.2 Termination by Sears upon Default by Licensee........................ 39
14.3 Termination After Opportunity to Cure................................ 39
14.4 Termination on Store Closing or Casualty............................. 40
14.5 Effect of Termination................................................ 40
14.6 Survivability........................................................ 41
15. ASSIGNMENT................................................................ 41
15.1 Assignment by Licensee............................................... 41
15.2 Assignment by Sears.................................................. 41
15.3 Binding Nature....................................................... 41
16. MISCELLANEOUS............................................................. 41
16.1 Choice of Law........................................................ 41
16.2 Jurisdiction and Venue............................................... 42
16.3 Notices.............................................................. 42
16.4 Severability......................................................... 42
16.5 No Waiver............................................................ 43
16.6 Cumulative Rights.................................................... 43
16.7 Construction......................................................... 43
16.8 Survival............................................................. 43
16.9 Entire Agreement; Modifications...................................... 43
SCHEDULE 1.1A .................................................................. 44
AUTHORIZED MERCHANDISE AND/OR SERVICES......................................... 45
SCHEDULE 1.1B................................................................... 46
DESIGNATED SEARS STORES........................................................ 46
SCHEDULE 3.3A.................................................................. 64
LICENSEE MARKS.................................................................. 64
SCHEDULE 3.3B................................................................... 65
SEARS MARKS.................................................................... 65
SCHEDULE 4.1.................................................................... 66
SEARS FEES..................................................................... 66
SCHEDULE 4.1(a)................................................................. 69
TEST MARKETS .................................................................. 69
SCHEDULE 6.1(a)................................................................. 70
FACILITY SPECIFICATIONS........................................................ 70
SCHEDULE 6.1(f)................................................................. 71
HVAC........................................................................... 71
SCHEDULE 6.2 ................................................................... 72
CONSTRUCTION/REMODEL COSTS..................................................... 72
SCHEDULE 9.2.................................................................... 73
iv
CREDIT CARD CONDITIONS ........................................................ 73
ATTACHMENT 1 to SCHEDULE 9.2 ................................................... 78
OPERATING INSTRUCTIONS ........................................................ 78
v
LICENSE AGREEMENT
THIS LICENSE AGREEMENT (the "Agreement") is made and entered into as of June 30,
2004 (the "Effective Date"), by SEARS, ▇▇▇▇▇▇▇ AND CO., a New York corporation
("Sears"), and H&R BLOCK SERVICES, INC., a Missouri corporation ("Licensee").
Sears and Licensee hereby agree as follows:
1. GRANT OF LICENSE
1.1 License for On-Premises Operations.
▇. ▇▇▇▇▇ hereby grants Licensee the non-exclusive privilege of
conducting and operating, and Licensee shall conduct and operate
pursuant to the terms, provisions and conditions contained in
this Agreement, a licensed business ("Licensed Business") to
offer and sell only the merchandise and services listed on
Schedule 1.1A ("Authorized Merchandise/Services"), only at the
Sears locations described on Schedule 1.1B ("Designated Sears
Store(s)"). Any changes, additions or deletions of merchandise or
services from Schedule 1.1A require the prior written approval of
Sears. Licensee shall be permitted to conduct the Licensed
Business at the Designated Sears Stores each year any time during
the period of January 1 through April 30 (the "Tax Season").
▇. ▇▇▇▇▇ additionally grants to Licensee the right at Licensee's
option to conduct income tax return preparation training classes
(the "Tax Classes") for the general public, but only in those
Designated Sears Stores where the Sears Store General Manager
from time to time authorizes the conduct of the Tax Classes. The
amount and location of the space to be utilized for the Tax
Classes shall be determined solely by the Sears Store General
Manager and such space shall be separate and distinct from the
space required under this Agreement for the operation of the Tax
Service. Terms related to the operation of Tax Classes in each
location are to be agreed to between Sears Store General Manager
and Block District Manager. The Tax Classes shall be conducted
under Licensee's own name, and Sears' name will not be used in
connection therewith. Each Tax Class will operate for a period of
time determined by Licensee, but such period shall be completed
no later than mid-December of each year in which the Tax Classes
are authorized.
c. With the exception of the Tax Classes, the services provided by
Licensee hereunder shall be referred to collectively as the "Tax
Services" except, where the context requires, the service that
Licensee is authorized to conduct for electronic filing shall be
referred to as "Electronic Filing Services". References to the
Licensed Business shall mean the Tax Classes, Electronic Filing
Services and the Tax Services.
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1.2 No Representations.
Sears makes no promises or representations whatsoever as to the
potential amount of business Licensee can expect at any time from the
operation of the Licensed Business. Licensee is solely responsible for any
expenses it incurs related to this Agreement, including, but not limited
to, any increase in the number of Licensee's employees or any expenditures
for additional facilities or equipment.
1.3 Licensee's Franchisees.
Licensee may operate the Licensed Business hereunder at various
Designated Sears Stores through operators franchised by Licensee but only
after Licensee has submitted such franchise operated locations to Sears
for its approval. Licensee shall make the terms and conditions of this
Agreement known to all such franchise operators and secure such franchise
operators' written agreement to comply with all the terms and conditions
hereof and to assume all of Licensee's obligations hereunder in the
performance of the Licensed Business on Sears' premises. Licensee agrees
to include in any and all agreements with its franchisees a provision that
Licensee and its franchise operators acknowledge that Sears is a third
party beneficiary of all Licensee's rights and Licensee's franchise
operators' obligations under the agreement between Licensee and its
franchise operators which directly or indirectly pertains to the control,
protection, and maintenance of Sears' trademarks, service marks, trade
names, and the good will pertaining thereto. Accordingly, Sears shall have
the right to require compliance by Licensee's franchise operators and to
enforce directly against the franchise operators all provisions of the
agreement between Licensee and its franchise operators which directly or
indirectly pertain to Sears' third party beneficiary rights hereunder.
Such provisions shall pertain only to the control, protection and
maintenance of Sears trademarks, service marks, trade names, and the good
will pertaining thereto, and are not to be construed as granting Sears any
right or power to control the details of the daily operation of the
Licensed Business by Licensee's franchise operators unrelated to the
control, protection and maintenance of Sears trademarks, service marks,
and trade names, all of the rights and powers being retained exclusively
by Licensee or its franchise operators, as the case may be.
Licensee shall closely monitor the operations of such franchise
operators and take all steps necessary to assure such franchise operators'
compliance with the terms and conditions of this Agreement. If this
Agreement is terminated for any reason as to one (1) or more Designated
Sears Store locations, then any agreement between the Licensee and a
franchise operator of Licensee to operate the Licensed Business at such
location shall also terminate simultaneously and neither Licensee nor
Licensee's franchise operators shall be entitled to damages, if any as a
result of such termination. Notwithstanding the foregoing, Licensee shall
at all times continue to be fully and primarily responsible and liable to
Sears for the faithful performance of all the terms and conditions of this
Agreement by Licensee's franchisees.
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2. TERM
The term of this Agreement ("Term") shall be for a three (3) year
period beginning on the Effective Date, and ending at the close of
business on July 31, 2007, unless sooner terminated under any of the
provisions of this Agreement.
3. USE OF SEARS MARKS
3.1 Licensed Business Name; Other Communications.
Except with the prior written approval of Sears, Licensee shall
operate the Licensed Business only under the name "H&R Block at Sears"
(the "Licensed Business Name"). In this regard, the exterior signage for
the Designated Sears Stores shall use the Licensed Business Name. However,
inside each Designated Sears Store being operated by Licensee hereunder
and in the general conduct of the Licensed Business, Licensee shall be
free to use forms, other materials and operations not referring to or
using the Sears name. Licensee shall use the Licensed Business Name and
the name "Sears" in connection with the operation of the Licensed Business
and only in a manner expressly described herein. Sears shall use the
Licensed Business Name and the name "H&R Block" only in a manner expressly
described herein. All communications with persons or entities other than
customers or potential customers of the Licensed Business by Licensee
shall not use the Sears name or marks. Licensee shall not without Sears'
consent use any trademark, service ▇▇▇▇ or tradename owned by or licensed
to Sears except for use of the Licensed Business Name, which may only be
used in connection with the operation of the Licensed Business. Except as
specifically set forth in this Agreement, neither party has any right to
use in any manner or for any purpose any trademark, service ▇▇▇▇, logotype
or tradename owned by or licensed to the other party.
3.2 Use and Registration of Licensed Business Marks.
Both Sears and Licensee may jointly use the Licensed Business Name
and any other approved trademarks and service marks used in connection
with the Licensed Business (collectively, including the Licensed Business
Name, the "Licensed Business Marks"), and each party shall pre-approve any
proposed Licensed Business ▇▇▇▇, other than the Licensed Business Name,
which incorporates the Licensee Marks or trademarks, service marks or
trade names owned by or licensed to the other party. Sears acknowledges
and will not contest or challenge Licensee's exclusive ownership of the
trademarks, service marks and trade names owned by it or its affiliates
and listed on Schedule 3.3A, which is attached hereto and incorporated
herein, which may be amended from time to time by written agreement of the
parties (the "Licensee Marks") and Licensee acknowledges and will not
contest Sears' or its affiliates' exclusive ownership of its trademarks,
service marks and trade names and Licensed Business Marks other than the
Licensed Business Name and Licensee Marks (collectively, the "Sears
Marks"), which is attached hereto as Schedule 3.3B and incorporated herein
and which may be amended from time to time by written agreement of the
parties. Upon expiration or
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termination of this Agreement, each party shall immediately stop using all
marks of the other party unless such post termination use is specifically
authorized in this Agreement.
3.3 Prosecution of Claims Relating to Licensed Business Name.
Neither party may prosecute or otherwise pursue any claim against
any third party for infringement or misappropriation of the Licensed
Business Name without the prior written consent of the other party, and
such other party may withhold or condition its consent in its reasonable,
good faith discretion.
3.4 Rights of the Parties.
Neither party shall register or attempt to register any ▇▇▇▇ of the
other party. Each party shall execute all documents the other party or its
affiliates requests to confirm such party's or its affiliates' ownership
interest in any Licensed Business Marks or Marks of that party. Nothing in
this Agreement shall be construed to bar either party or its affiliates
from protecting its rights in its Marks against infringement or
misappropriation by any party or parties, including the other party, or
from claiming rights in any intellectual property other than that as to
which ownership is expressly provided for in this Agreement.
3.5 Injunctive Relief.
Licensee acknowledges that the Sears Marks possess a special, unique
and extraordinary character, which makes it difficult to assess the
monetary damage Sears or its affiliates would sustain in the event of
unauthorized use, and Licensee agrees that in the event of breach of this
Section 3 by Licensee, there would be no adequate remedy at law and
preliminary or permanent injunctive relief would be appropriate.
Sears acknowledges that the Licensee Marks possess a special, unique
and extraordinary character, which makes it difficult to assess the
monetary damage Licensee or its affiliates would sustain in the event of
unauthorized use, and Sears agrees that in the event of breach of this
Section 3 by Sears, there would be no adequate remedy at law and
preliminary or permanent injunctive relief would be appropriate.
3.6 Infringing Use.
Each party shall notify the other party in writing by certified
mail, return receipt requested, within five business days after it has
knowledge of any infringement, misuse, dilution, acts of unfair
competition or damaging acts related to the other party's Marks or any
names, symbols, emblems, designs or colors which would be confusingly
similar in the minds of the public to the other party's Marks, as well as
any other patent, trademark, trade secret, service ▇▇▇▇, trade name, trade
dress, copyright, domain name, right of publicity or other intellectual
property right in any way related to or affecting the Authorized
Merchandise/Services. The other party or its affiliates may, at its sole
expense, take such action as it determines, in its sole discretion, is
appropriate. Each
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party shall cooperate and assist in such protest or legal action at the
affected party's or its affiliates' expense. Neither party shall undertake
any protest or legal action with respect to any ▇▇▇▇ of the other party
without first securing the other party's written permission to do so. For
the purposes of this section, expenses shall include reasonable attorneys'
fees and costs. All recovery in the form of legal damages or settlement
shall belong to the party bearing the expense of such protest or legal
action.
3.7 Good Will.
Licensee recognizes the substantial good will associated with any
and all Sears Marks as described in this Section and acknowledges that all
rights therein, and good will pertaining thereto, belong to Sears or its
affiliates. Licensee further acknowledges that all use of the Sears Marks
by Licensee shall inure to the benefit of Sears and will not impair the
validity or good will associated with the Sears Marks.
Sears recognizes the substantial good will associated with any and
all Licensee Marks as described in this Section and acknowledges that all
rights therein, and good will pertaining thereto, belong to Licensee or
its affiliates. Sears further acknowledges that all use of the Licensee
Marks by Sears shall inure to the benefit of Licensee and will not impair
the validity or good will associated with the Licensee Marks.
3.8 Survival.
The provisions of this Section 3 shall survive the expiration or
termination of this Agreement.
4. SEARS FEES.
4.1 Amount.
Licensee shall pay Sears fees (collectively, "Sears Fees") in
accordance with Schedule 4.1 hereto. In lieu of the Standard Fees, the
parties agree to designate certain locations, representing not less than
fifty (50) Designated Sears Store locations, at which to test the modified
fee schedule set forth on Schedule 4.1 (b) for the first twenty-four
months of the Term. The parties shall select and agree upon the fifty
locations at which the test shall be conducted and intend that the
locations shall include some of the highest performing locations and some
of the lowest performing locations, and the same fifty store locations
shall be used throughout the test period. Upon the completion of the test,
if the parties agree, they shall implement the test approach nationally.
If the parties do not agree, no national test approach shall occur and the
test store locations shall revert to the Standard Fees set forth on
Schedule 4.1(a).
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4.2 Net Sales.
"Net Sales" means Gross Sales from operation of the Licensed
Business, less sales taxes, returns, allowances or adjustments and
discounts. Net Sales shall not include, and no fees shall be due to Sears
(other than as set forth in Section 3 of Schedule 4.1) in consideration of
sales of any financial services products to Customers. For this purpose,
financial services products shall include all products identified in
Section 5 of Schedule 1.1A and any other similar products not otherwise
identified on said Schedule. RAL/RAC products shall not count toward Net
Sales until Licensee receives funding for same.
4.3 Gross Sales.
"Gross Sales" means all of Licensee's direct or indirect sales of
Authorized Merchandise/Services from the Licensed Business, including, but
not limited to, sales arising out of referrals, contacts, or
recommendations obtained through the operation of the Licensed Business.
Without limiting the generality of the foregoing, Gross Sales shall
include any and all sales of Authorized Merchandise/Services to any
Customer (as hereinafter defined in Section 4) of the Licensed Business
regardless of whether such sales are made in the Licensed Business area of
Sears or at Licensee's other place(s) of business or in the customer's
home. A "Customer" of the Licensed Business is any customer or prospective
customer who becomes first known to Licensee as a result of contact made
through Licensee's operation of the Licensed Business and who subsequently
purchases services from Licensee in another location during the same Tax
Season. The parties acknowledge that each year, client migration occurs
between the Designated Sears Stores and the other offices of Licensee and
that this migration is solely at the discretion of the customer. The
parties agree that Licensee cannot be held accountable for this migration.
However, Licensee agrees that it will not intentionally move or attempt to
move customers from a Sears location to another Licensee location.
5. OPERATIONAL OBLIGATIONS OF LICENSEE
5.1 Operational Standards.
Licensee has provided the Sears corporate Licensed Business
Department with copies of its written procedures and policies establishing
minimum standards of quality and customer service. Licensee shall
immediately advise Sears of any proposed changes in Licensee's standards.
Without limiting Licensee's obligations under Section 5.7, Licensee shall
observe no less than such minimum standards of quality and customer
service. Sears may visit the Licensed Business Area at any reasonable time
during business hours for the purpose of verifying Licensee's compliance
with its standards of quality and customer service.
(a) Licensee and Sears shall conduct their respective operations in
a courteous and efficient manner and shall present a neat, business-like
appearance, including
12
adherence by Licensees' employees to a reasonable dress code. Licensee
shall abide by all safety and security rules and regulations of the Sears
stores in effect from time to time.
(b) All of the services performed by Licensee in connection with the
Licensed Business shall be of the highest standard and performed in
accordance with the level of professional care customarily observed by
highly skilled professionals rendering services similar to those offered
through the Licensed Business.
5.2 Hours of Operation.
The Licensed Business shall, during the Tax Filing Season, be kept
open for business and operated during the same business hours that the
Sears retail store is open for business unless otherwise agreed to by both
parties.
5.3 Pricing.
Sears shall have no right or power to establish or control the
prices at which Licensee offers Authorized Merchandise/Services in the
Licensed Business. Such right and power is retained by Licensee, and
Licensee shall participate, at its option, in Sears national store-wide
sales and/or merchandise price-off events.
5.4 Discount Policy.
Licensee shall offer Authorized Merchandise/Services to employees,
licensees of Sears and their family members, to the extent such employees
and family members are eligible for Sears' associate discount, at a ten
percent (10%) discount only if such purchases are paid for with cash,
check or the Sears Card (as defined in Section 9.2) and only upon
presentation of a valid Sears discount card.
5.5 Customer Loyalty Programs.
Licensee may, at Licensee's discretion, accept any and all
certificates and coupons relating to customer loyalty programs that may
from time to time be operated by Sears. Licensee agrees to be flexible in
considering Sears' request to participate in such customer loyalty
programs. Prior to requesting Licensee to accept such certificates or
coupons, Sears will provide Licensee with a list of all such loyalty
programs and instructions as to the proper procedures for handling them.
If Licensee agrees to accept any such certificates, Sears shall reimburse
Licensee for the cost of all such certificates and coupons accepted,
provided Licensee has followed the prescribed procedures.
5.6 Customer Adjustment/Service.
Licensee shall at all times maintain a general policy of
"Satisfaction Guaranteed" to customers and shall promptly adjust all
complaints of and controversies with customers arising out of the
operation of the Licensed Business. In any case in which an adjustment
made by Licensee is unsatisfactory to the customer and Sears has first
investigated the
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customer complaint with the Licensee's local manager, Sears shall have the
right, at Licensee's expense, to make such further adjustment as Sears
deems necessary under the circumstances, and any adjustment made by Sears
shall be conclusive and binding upon Licensee. Sears may deduct the
amounts of any such adjustments from the sales receipts held by Sears as
described in Section 9.3. Licensee shall maintain files pertaining to
customer complaints and their adjustment and, to the extent consistent
with applicable laws, shall make such files available to Sears. Licensee
shall not use the services of a collection agency or undertake any legal
proceeding against any Licensed Business customer without the prior
written approval of Sears other than legal proceedings involving
allegations of fraud or deception, and Licensee shall not institute any
legal proceedings in Sears' name.
5.7 Employee Standards.
Licensee shall employ all management and other personnel necessary
for the efficient operation of the Licensed Business. All persons hired
and used by Licensee to prepare tax returns in the Licensed Business shall
be competent and qualified tax return preparers. Except as set forth
herein, the Licensed Business shall be operated solely by Licensee's
employees, and not by independent contractors, sub-contractors,
sub-licensees or by any other such arrangement. Licensee shall use its
best efforts to ensure that Licensee's employees working in the Licensed
Business do not work concurrently in any of Licensee's non-Sears
locations.
Licensee shall maintain a system of monitoring that is consistent
with Licensee's standard policies whereby qualified personnel retained by
Licensee will check randomly at the Sears locations the manner in which
tax returns are being prepared for taxpayers.
5.8 Licensee's Employees.
Licensee has no authority to employ persons on behalf of Sears, and
no employees of Licensee shall be deemed to be employees or agents of
Sears. Licensee has sole and exclusive control over its labor and employee
relations policies and its policies relating to wages, hours, working
conditions, or conditions of its employees. Licensee agrees that it will
prepare a training manual for the use of its personnel and furnish its
personnel with necessary tax reference materials. Licensee has the sole
and exclusive right to hire, transfer, suspend, lay off, recall, promote,
assign, discipline, adjust grievances and discharge its employees,
provided, however, that Sears may request at any time that Licensee remove
from the Licensed Business any employee of Licensee or any of Licensee's
officers, managers or owners who is objectionable to Sears because of risk
of harm or loss to the health, safety and/or security of Sears customers,
employees or merchandise and/or whose manner impairs Sears' customer
relations. After Licensee's employee has been removed from the Designated
Sears Store, Sears agrees to review with Licensee the events leading to
such removal and shall allow Licensee to reverse any removal that Licensee
can demonstrate was not based upon a reasonable expectation of risk of
harm or loss to the health, safety and or security of Sears customers,
employees or merchandise and/or whose manner impaired Sears' customer
relations. If Sears objects to
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any of Licensee's employees, and Licensee determines not to remove such
employee, Sears may terminate the affected location by giving thirty (30)
days notice to Licensee.
During the Term of this agreement and for ninety (90) days after
termination or expiration thereof, neither party shall solicit or offer
employment (other than through advertisements of general circulation) to
any person who was an employee at a District Manager level or above of the
other party.
5.9 Employee Compensation.
Licensee is responsible for paying all salaries and other
compensation of its employees and shall make all necessary salary
deductions and withholdings from its employees' salaries and other
compensation. Licensee is also responsible for paying any and all
contributions, taxes and assessments and all other requirements of the
federal social security, federal and state unemployment compensation and
federal, state and local withholding of income tax laws on all salary and
other compensation of its employees.
5.10 Compliance with Labor Laws.
Licensee shall comply with all federal, state and local laws,
ordinances, rules and regulations (collectively, "Labor Laws") regarding
its employees, including, but not limited to, federal or state laws or
regulations regarding minimum compensation, overtime and equal
opportunities for employment whether or not Licensee may otherwise be
exempt from such Labor Laws because of its size or the nature of its
business or for any other reason whatsoever.
5.11 Compliance with Law.
Licensee shall, at its expense, obtain all permits and licenses
which may be required under any applicable federal, state, or local law,
ordinance, rule or regulation by virtue of any act performed in connection
with the operation of the Licensed Business. Licensee shall comply fully
with all applicable federal, state and local laws, ordinances, rules and
regulations.
5.12 Payment of Obligations.
Licensee shall, at its expense, collect, pay and discharge all
license fees, business, use, sales, gross receipts, income, property or
other applicable taxes or assessments which may be charged or levied by
reason of any act performed in connection with the operation of the
Licensed Business, excluding, however, all taxes and assessments
applicable to Sears income from Sears Fees or applicable to Sears
property. Licensee shall be responsible for calculating the sales tax rate
applicable to all Authorized Merchandise/Services sold through the
operation of the Licensed Business. Licensee shall promptly pay all its
obligations, including those for labor and material.
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5.13 Licensee's Obligations.
Licensee shall not make purchases or incur any obligation or expense
of any kind in the name of Sears.
5.14 Liens.
Licensee shall not allow any liens, claims or encumbrances to attach
to any Sears property or against any of the Designated Sears Stores. In
the event any lien, claim or encumbrance so attaches or is threatened,
Licensee shall immediately take all necessary action to cause such lien,
claim or encumbrance to be satisfied and released. In the event Licensee
fails to immediately cause such lien, claim or encumbrance to be satisfied
or released, Sears may, in its sole discretion, terminate this Agreement
and/or charge Licensee or withhold from the sales receipts retained under
Section 9.3 all expenses, including attorneys' fees, incurred by Sears in
removing and/or resolving such liens or claims.
5.15 Licensee Audit Program.
Licensee, at its expense, shall develop and implement a program to
conduct internal audits of the Licensed Business, which shall be similar
to the normal audit procedures utilized by Licensee in its normal course
of business, to verify accuracy of sales and Sears Fees and shall provide
to Sears the results of any and all such audits.
5.16 Preparer.
The name "H&R Block" or the name of the Licensee affiliate which is
the preparer of the tax return, which name shall include "H&R Block, shall
be placed upon each return prepared by the Tax Service as the "preparer"
of such return and the signature line on the return shall be completed in
such form as will comply with Internal Revenue Service rules, instructions
and practices. The name Sears shall not be used or appear in any manner on
such returns.
5.17 Preparer's Responsibilities.
Licensee will advise each of its tax return preparers of such
preparers' responsibilities under the Internal Revenue Code and applicable
regulations.
5.18 Licensee's Guarantee to Customers.
Licensee will issue to each of its customers hereunder the following
H&R Block guarantee:
"If your income tax return is audited, H&R Block will appear
with you at that audit at no extra cost and explain how your
return was prepared, even though we cannot act as your legal
representative. Our employee training
16
and system of safeguards are carefully designed to assure
the accuracy of your return. If we make any error in the
preparation of your tax return that costs you any interest
or penalty on additional taxes due, while we do not assume
the liability for the additional taxes, we will pay that
interest and penalty."
Under no circumstances will Sears assume, be liable for or pay any
penalties, interest, assessment or claims of any kind arising out of any
actual or alleged error or omission in any tax return prepared by Licensee
hereunder.
5.19 Quotation of Charges.
All charges for Tax Service will be quoted to the customer during
the interview. Licensee shall not charge customers for estimates or quotes
for tax preparation services. However, Licensee shall not be prevented
from charging customers for selected tax services that require the
preparation of estimated tax return information for the customer.
5.20 Copies of Tax Returns; Taxpayer's Files.
Licensee agrees that it will retain copies of all tax returns
prepared by it in such manner and for such period of time as is consistent
with Licensee's maintenance of tax returns prepared for Licensee's retail
customers other than Customers. Licensee shall at all times retain sole
rights to its customer's files.
6. LICENSED BUSINESS AREA
6.1 Locations.
(a) Licensee agrees to operate the Licensed Business during each Tax
Season during the Term in a minimum of eighty percent (80%) of the Sears
locations which are located in areas where Licensee is the direct provider
of Tax Services under Licensee's trademarks ("Licensee Owned Retail
Territories"). Licensee shall offer its franchisees the opportunity to
provide Tax Services at locations within Sears stores, but Licensee does
not guarantee or warrant that any, or any certain number, of franchisees
will accept such offer. The commitment of Licensee set forth in this
Section 6.1(a) applies only to Licensee Owned Retail Territories. Sears
has the right, in its sole discretion, to waive this 80% store
requirement.
(b) During each Tax Season, Licensee agrees to operate the Licensed
Business at those Sears locations in Licensee Owned Retail Territories
which had gross revenues of more than Twenty Million Dollars
($20,000,000.00) during the 12 month period from August 1 - July 31
immediately prior to such Tax Season, ("Large Sears Stores"). Licensee
shall offer its franchisees the opportunity to offer Tax Services at Large
Sears Stores in such franchisee's territories, but Licensee does not
guarantee or warrant that any, or any certain number of franchisees, will
accept such offer. The commitment of
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Licensee set forth in this Section 6.1(b) applies only to Licensee Owned
Retail Territories. The locations identified in this Section 6.1(b) shall
count toward the requirement of Section 6.1(a).
(c) Notwithstanding the provisions of Sections 6.1(a) or 6.1(b) of
this Agreement, Licensee shall not be required to operate the Licensed
Business at any Designated Sears Store at which Licensee did not complete
(and receive payment for) at least 300 federal income tax returns during
the second Tax Season after the Licensed Business was first opened at that
location. Thus for a Licensed Business location first opened for business
in Tax Season 2003, if Licensee did not complete and receive payment for
at least 300 federal income Tax Returns by the end of Tax Season 2004,
then Licensee shall not be required to operate the Licensed Business at
such location for Tax Year 2005 and succeeding Tax Years, unless otherwise
agreed by the parties. For purposes hereof, multiple sets of filings for a
single taxpayer or taxpayers filing jointly shall be considered one
return. Locations at which Licensee does not operate the Licensed Business
under this Section 6.1(c) shall nevertheless count toward the requirements
of Section 6.1(a).
(d) If Licensee decides to open a location offering Tax Services in
any shopping mall where Sears operates a Sears full-line store, Licensee
shall first offer Sears the option to bring such proposed location within
the terms of this Agreement. Sears shall exercise such option in writing
to Licensee within thirty days after Sears receives written notice from
Licensee that Licensee intends to open such location. For purposes of the
option set forth herein, the term "Shopping Mall" shall mean an enclosed,
connected retail mall in which it is possible to enter all or
substantially all of the retail locations from a central enclosed
promenade. "Shopping Mall" shall not include a development commonly known
as a "strip mall" or "strip center." If Sears does not exercise such
option, Licensee shall be free to provide Tax Services (and any other
services of Licensee's choosing) from such location without any obligation
to Sears hereunder. In addition to the right of Licensee to establish mall
locations as set forth herein, subject to the Sears' right of first
refusal, the parties will cooperate with one another to transition
locations from inside Sears stores to mall locations as appropriate and
depending on the availability and suitability of mall locations. Sears
agrees to reimburse Licensee for the rent of the mall locations as well as
the documented mall lease expenses, including common area maintenance,
utilities, and phone installation, as agreed by the parties.
(e) The Designated Sears Stores where Licensee shall operate the
Licensed Business, during the Tax Season, including any Existing Locations
as defined below, shall be set forth in Schedule 1.1B. The list of
locations of the Designated Sears Stores shall be mutually agreed no later
than October 1 prior to the start of the Tax Filing Season.
(f) Sears shall provide space for the operation during the Tax
Season within each Designated Sears Store covered by this Agreement. Such
space shall be used solely for the conduct of the Tax Service during the
Tax Filing Season. Sears shall provide heating and cooling as set forth on
Schedule 6.1(f). In the event Sears does not provide space
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meeting the specifications on Schedule 6.1(f), Licensee shall provide
written notice to the Sears Store Manager of such noncompliance. Sears
shall promptly commence cure of any such noncompliance and shall
thereafter work to cure such completion in as expeditious a manner as is
reasonably possible under the ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇ the event that Sears does
not correct such failure or promptly commence to cure within a reasonable
period of time, then Licensee may withdraw from the location(s) at which
Sears does not comply without liability to Sears. Any location from which
Licensee withdraws pursuant to this Section shall nevertheless be included
in the calculation required by Section 6.1(a) for the then occurring (or
next succeeding, if withdrawal is prior to the commencement of a Tax
Season) Tax Season as if such office were still being operated as part of
the Licensed Business.
Sears shall not at any Designated Sears Store(s) provide space or
permit operations by any person or entity which engages in the sale or
distribution of any Authorized Merchandise/Services except as set forth
below. This prohibition shall also apply to any Sears Store which is
located at or adjacent to any mall locations where Licensee operates the
Licensed Business. However, if Licensee terminates a Licensed Business
located in a Designated Sears Store or ceases operations at any mall
location, Licensee shall have no further rights with respect to such
location and Sears may offer or contract with any other party to operate
the Licensed Business in that Sears store.
(g) The location within each Designated Sears Store where Licensee
operates the Licensed Business shall be known as the "Licensed Business
Area". The costs associated with preparing and constructing the Licensed
Business Area shall be divided between the parties as set forth on
Schedule 6.2. For any Designated Sears Store listed on Schedule 1.1B
wherein the Licensed Business was in operation either by Licensee or
another vendor prior to the Effective Date ("Existing Location(s)"), the
Licensed Business shall continue to be located in the Existing
Location(s), subject to the terms of this Agreement (including but not
limited to Section 6.6).
6.2 Additional Locations.
For those Designated Sears Stores added by amendment to Schedule
1.1B after the Effective Date ("Additional Location(s)"), Sears shall
submit to Licensee a diagram showing the defined area of space to be
provided by Sears for the operation of the Licensed Business ("Block
Plan") in such Designated Sears Stores. Licensee shall be solely
responsible for providing final plans for the Licensed Business Area in
the Additional Locations, and Licensee shall authorize Sears to prepare
the final blueprint plans in accordance with Schedule 6.2. All costs and
expenses related to such plans, including but not limited to blueprints,
shall be borne by Licensee. The expense of preparing the Licensed Business
Area in the Additional Location shall be divided between the parties as
described on Schedule 6.2. All improvements or installations that vary
from Sears standard specifications must be approved by Sears in advance,
and shall be made at Licensee's sole expense.
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6.3 Improvements.
All permanent improvements to the Licensed Business Area shall
become the property of Sears at the expiration or termination of this
Agreement. At the expiration or termination of this Agreement, or if
Licensee vacates or abandons the Licensed Business, Licensee shall convey
to Sears, without charge, good title to such improvements free from any
and all liens, charges, encumbrances and rights of third parties.
6.4 Commencement of Operations.
If the Licensed Business is not fully operational at any Designated
Sears Store within thirty (30) days after Sears has made the Licensed
Business Area ready for Licensee, Sears may, at Sears sole option,
terminate that location and have no further obligation to Licensee, and
Licensee shall reimburse Sears within ten (10) days after receipt of an
invoice, for Sears' costs of constructing the Licensed Business Area and
of restoring such space back to its condition immediately prior to the
commencement of such construction.
6.5 Condition of Licensed Business Area.
Licensee shall, at its expense, keep the Licensed Business Area in a
thoroughly clean and neat condition and shall maintain Licensee's
Equipment (as defined in Section 8.1) in good order and repair. Sears
shall provide routine janitorial service in the Licensed Business Area
consistent with the janitorial services regularly performed in the
Designated Sears Store. Occupying more than the space allocated by the
Block Plan, and failure to withdraw from such additional, unallocated
space shall be grounds for termination of a Licensed Business Area, or for
termination of this Agreement if the uncorrected situation exists in
multiple locations.
6.6 Changes of Location/Remodeling.
Sears shall use reasonable efforts to provide the space requirements
as set forth in Schedule 6.1(a). Sears shall have the right, in its sole
discretion, to change the location, dimensions and square footage of the
Licensed Business Area from time to time during the Term of this Agreement
in accordance with Sears' judgment as to what arrangements shall be most
satisfactory for the general good of the Designated Sears Store(s). In the
event Sears decides to change the location of the Licensed Business Area,
Sears shall move Licensee's Equipment to the new location and prepare the
new space for occupancy by Licensee and the expense shall be allocated
between the parties as described on Schedule 6.2. The specifications for
any such relocated Licensed Business Area shall be as set forth on
Schedule 6.1(a). However, Sears shall use reasonable efforts to not change
the location of the Licensed Business during the Tax Season. If Sears
changes a location during the Tax Season, Sears shall place signage,
acceptable to Licensee, notifying customers of such change and directing
them to the new location.
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If Licensee agrees that a Licensed Business Area should be remodeled
and subsequently terminates or abandons the Licensed Business Area prior
to the date Sears has made such area ready for occupancy by Licensee,
Licensee shall reimburse Sears for all Sears' costs incurred in planning,
preparing, constructing and improving the Licensed Business Area,
including the cost to restore such area to its condition immediately prior
to the commencement of construction.
6.7 Electric/HVAC.
Sears shall furnish, at reasonable hours and except as otherwise
provided, without expense to Licensee, reasonable amounts of heat, light,
air conditioning and electric power for the operation of the Licensed
Business Area consistent with the specifications therefor set forth on
Schedule 6.1(f), except when prevented by strikes, accidents, breakdowns,
improvements and repairs to the heating, lighting and electric power
systems or other causes beyond the control of Sears.
6.8 Telephone Service.
Sears shall provide a single Direct Inward Dial number for the
Licensed Business Area(s) and Sears shall bear the cost of outbound local
and toll-free calls and compatible phone hardware for Licensee. Sears
shall pay the entire cost of the installation of the telephone equipment
necessary to provide such service. If Licensee requires additional phone
lines to be installed in the Licensed Business Area(s), Licensee shall
arrange with the appropriate telephone company for such installation and
all installation costs and monthly service associated with any such
additional phone lines are to be paid by Licensee. Licensee shall arrange
with the appropriate telephone company for direct billing to Licensee of
all long distance calls made in the Licensed Business location(s).
Notwithstanding the foregoing, Licensee may install and maintain, at its
own cost and expense, one or more separate data lines to be used solely
for the purpose of transmitting sales and other data from the Licensed
Business location(s) to Licensee's own computer data system. Licensee
shall arrange with the appropriate telephone company for such
installation, and all installation costs, local or long distance charges,
and monthly service fees associated with any such additional data line(s)
are to be paid by Licensee. Licensee shall arrange with the appropriate
telephone company for direct billing to Licensee of all charges associated
with the data line(s) in the Licensed Business location(s). The access
number(s) for such data line(s) shall not be advertised, publicized or
otherwise disclosed to customers of the Licensed Business. Upon expiration
or termination of this Agreement, Licensee shall retain ownership of the
telephone number(s) associated with the data line(s) but shall immediately
notify the telephone company to terminate service on the data line(s) at
each Licensed Business location.
Licensee has implemented an internal policy to establish the number of
telephone lines required in a tax office based upon the number of returns
prepared in that office. Sears agrees to make telephone service available
based upon Licensee's policy which is as follows:
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Number of Clients Number of Lines Needed
----------------- ----------------------
Less than 750 1 main listed line
751 - 1,500 1 main listed line, 1 hunting line
1,501 - 2,250 1 main listed line, 2 hunting lines
2,2551 - 3,000 1 main listed line, 3 hunting lines
3,000 and over 1 main listed line, 3 or more hunting lines
6.9 Telephone Numbers.
All telephone numbers used in connection with the Licensed Business
shall be separate from any phone number used by Licensee in any other
business operation. Any telephone number made public in connection with
the operation of the Licensed Business shall become the sole property of
Sears upon the expiration or termination of this Agreement. Upon
expiration or termination of this Agreement, Licensee shall immediately
cease to use such numbers and shall transfer such numbers to Sears or to
any party Sears designates, and Licensee shall immediately notify the
telephone company of any such transfer.
6.10 Telephone Directory Listings.
All telephone directory listings for the Licensed Business, whether
in the white pages, yellow pages or electronic media, shall be subject to
Sears' approval prior to placement; provided, however, that approval is
not required for listings consisting only of the Licensed Business Name
and its address at the Designated Sears Store.
6.11 Access to Licensed Business Area.
Licensee shall have access to the Licensed Business Area at all
times that the Designated Sears Store is open to customers for business
and at all other times as the appropriate Store General Manager approves.
Sears shall be furnished with keys to the Licensed Business Area and shall
have access to the Licensed Business Area at all times for legitimate
business purposes.
6.12 Effect of Store Leases.
If any Designated Sears Store is leased to Sears or is the subject
of an easement agreement, this Agreement shall be subject to all of the
terms, agreements and conditions contained in such lease or easement
agreement. In the event of the termination of any such lease by expiration
of time or otherwise, this Agreement shall immediately terminate with
respect to the affected Licensed Business Area without penalty to either
party as a result of such termination.
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6.13 Waiver of Premises Liability.
Licensee waives any and all claims it may have against Sears and any
other person or entity operating a Designated Sears Store for damage to
Licensee, for the safekeeping or safe delivery or damage to any property
whatsoever of Licensee or of any customer of the Licensed Business in or
about the Licensed Business Area, because any of the following:
(a) the actual or alleged negligence, act or omission of any tenant,
licensee or occupant of the premises at which the Licensed Business is
located;
(b) any damage caused by any casualty from any cause whatsoever,
including, but not limited to, smoke, fire, water, snow, steam, gas or
odors in or from any Designated Sears Store or its premises;
(c) the leaking of any plumbing, or because of any accident or event
which may occur in any Designated Sears Store or on its premises;
(d) the actual or alleged acts or omissions of any janitors or other
persons in or about any Designated Sears Store or on its premises; or
(e) from any other such cause whatsoever; except for damage caused
by Sears or such other operating entity's gross negligence.
7. PUBLIC COMMUNICATIONS
7.1 Advertising.
Licensee shall advertise and actively promote the Licensed Business.
Licensee shall at all times adhere to Sears Licensed Business Marketing
Manual provided to Licensee, as it may be updated from time to time
("Marketing Manual"). Prior to use in connection with the Licensed
Business, Licensee shall submit to Sears (a) all signs and advertising
copy (including but not limited to sales brochures, telemarketing scripts,
newspaper advertisements, radio and television commercials, and internet
advertising), and (b) all promotional plans and devices (including but not
limited to coupons, contests, events and giveaways). Licensee shall not
use any such advertising material, promotional plan or device without the
prior written approval of Sears. Sears has the right, in its sole
discretion, to disapprove or require modification of any and all such
advertising forms and other materials. Sears shall have the right to audit
Licensee's advertising and promotional materials and practices at any time
to assess Licensee's compliance with this Agreement, the Marketing Manual
and applicable legal requirements. Any unauthorized use of the Sears Marks
by Licensee, including but not limited to the unauthorized use by Licensee
of any Sears Marks as part of an electronic address, domain name, web site
or
23
search engine, shall constitute a breach of this Agreement and an
infringement of the rights of Sears in and to the Sears Marks.
During the period from December 1 through April 15 of each year
during the Term, Licensee shall engage in national advertising activities
(not including tiered, spot or similar advertisements) using a Sears
tagline consistent with the tagline used prior to the date hereof ("Sears
Advertisements"). Specifically, Licensee shall air Sears Advertisements
(i) designed to reach 1200 target rating points or (ii) equal to thirty
percent (30%) of the national television advertisements aired by Licensee
during the period in question, whichever is the less expensive commitment
to Licensee. Licensee shall pay all advertising expenses, including but
not limited to, the expenses incurred for in-store signing. All costs
relative to advertisements will be borne by Licensee.
7.2 Other Publicity.
Licensee shall not issue any publicity or press release regarding
its relationship with Sears, or regarding the Licensed Business, without
the prior consent of Sears. Licensee shall not refer to this Agreement,
the Licensed Business or Sears in any prospectus, annual report or other
filing, except to the extent required by federal or state law, and then
only after notifying Sears in writing a reasonable time prior to each
disclosure and using reasonable efforts to cooperate with Sears to enable
Sears to obtain an appropriate protective order or other restrictions on
disclosure. Licensee shall not refer to this Agreement, the Licensed
Business or Sears in the solicitation of business without obtaining Sears'
prior written approval. Licensee shall at all times adhere to Sears'
written policies regarding interaction with the media as contained in the
Marketing Manual.
7.3 Forms.
Upon Sears' request, Licensee shall provide Sears with copies of any
or all customer contract forms, warranty or guarantee documentation and
other forms and materials (collectively, "Forms") used in the Licensed
Business. Licensee and Sears shall discuss any reasonable business request
by Sears to modify such Forms within thirty (30) days after receiving
Sears' written request for such modifications. Licensee shall be solely
responsible for the adequacy of such Forms and Sears shall have no
liability for any suggested changes proposed by Sears which Licensee in
its sole discretion adopts.
Sears acknowledges that the Forms constitute Licensee's confidential
business information, and Sears agrees that it will not use for its own
benefit or permit others to use any such materials and that it will return
such materials to Licensee immediately upon request.
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8. LICENSED BUSINESS EQUIPMENT
8.1 Licensee's Equipment.
Entirely at its own expense, Licensee shall install all furniture,
fixtures and equipment necessary for the efficient operation of the
Licensed Business ("Licensee's Equipment"). Licensee's Equipment, and its
size, design and location, shall at all times be subject to Sears'
approval.
8.2 POS Terminal Provided by Sears.
At its expense, Sears shall furnish a point of sale terminal ("Sears
POS Terminal") for use in the Licensed Business solely to allow Licensee
to accept payment with the Sears Card as defined in Section 9.2 below.
Such Sears POS Terminal shall be of a size and design satisfactory to
Sears, in its sole discretion, and shall at all times be and remain the
property of Sears. Such Sears POS Terminal shall be comparable to those
used by Sears in its own merchandise departments and shall have the
capability of processing a Sears Card (as defined in Section 9.2) and any
other credit cards Sears may accept from time to time. Licensee shall
immediately return such Sears POS Terminal to Sears upon demand. Sears
shall have the right to take possession of the Sears POS Terminal at any
time without giving prior notice to Licensee.
8.3 Licensee-Provided POS Terminal.
At its expense, Licensee shall furnish a point of sale terminal
("Licensee POS Terminal") for use in the Licensed Business to accept all
other forms of payment than the Sears Card. Licensee shall pay for all
equipment, including any necessary peripheral equipment (e.g. terminals,
modems and printers) required and for all installation and phone line
charges.
9. TRANSACTIONS AND SETTLEMENT
9.1 Checks.
All checks shall be processed through the Licensee POS Terminal or
other electronic means and made payable to the Licensed Business Name. Any
and all losses that may be sustained by reason of nonpayment of any checks
upon presentment shall be borne by Licensee, and Sears shall have no
liability with respect to such checks. Licensee may establish a bank
account in the name of "Licensee, d/b/a the Licensed Business Name" solely
for clearing customer checks. In no event shall Licensee have or obtain
check blanks using the Licensed Business Name.
9.2 Credit Sales.
Subject to the terms and conditions outlined on Schedule 9.2 (the
"Credit Card Conditions"), which is attached hereto and incorporated
herein, Licensee shall accept
25
through the Sears POS Terminal the SearsCard(R), Sears Premier Card(R),
Sears MasterCard(R), Sears Gold MasterCard(R), Sears Premier Gold
MasterCard(R) and The Great Indoors(R) Gold MasterCard(R) (each, a "Sears
Card") issued by Sears National Bank and any other credit card hereinafter
issued by Sears National Bank for payment for Authorized
Merchandise/Services. Licensee shall also accept and process through the
Licensee POS Terminal such other credit cards issued by third parties
("Third Party Credit Cards"), subject to the terms and conditions outlined
in the merchant agreement between Licensee and the Issuer.. Each Sears
Card and each Third Party Credit Card are referred to individually herein
as a "Credit Card" and are referred to collectively herein as the "Credit
Cards". Licensee shall not attempt to suppress or discriminate against use
of any Credit Card by any person whose name is on the Credit Card or any
other authorized user of such Credit Card (collectively, the
"Cardholder"). Licensee shall accept the Credit Cards at all Licensed
Business locations authorized under this Agreement for the purchase of
Authorized Merchandise/Services, provided that the Credit Card
transactions resulting from acceptance of each Credit Card must be in
United States dollars. The preferred method of payment is a Sears Card or
a Sears MasterCard Card.
All Sears Card transactions shall be submitted to Sears, in the
manner that Sears designates, for settlement with the issuing bank
("Issuer"). Each Issuer shall process such transactions as if Sears had
engaged in such transactions itself. Subject to all of the terms and
conditions of this Agreement, including Sears' rights under Section 9.8,
Sears shall pay all sums due Licensee on each sale of Authorized
Merchandise/Services made by Licensee to a Cardholder that is charged to a
Sears Card account (a "Sears Card Sale") in accordance with Section 9.4.
Licensee hereby grants Sears the right to accept payments and settlements
by Issuers for each Sears Card Sale on behalf of Licensee. Licensee
acknowledges that no Issuer shall have any further obligation with respect
to Licensee regarding such payments and settlements and that Licensee's
sole recourse shall be to Sears. All losses sustained by Sears as a result
of non-payment by a Cardholder on a Sears Card account shall be borne by
Sears, provided that Licensee is not responsible for the non-payment and
has complied with the Sears Card Conditions. Except for non-payment of a
Sears Card account by a Cardholder, Sears shall have no liability
whatsoever to Licensee for Sears' failure to properly accept or reject a
Cardholder's charge.
Licensee, at its sole expense, shall enter into an appropriate
merchant agreement with each Issuer to enable Licensee to accept Third
Party Credit Cards. All Third Party Credit Card transactions shall be
submitted to the Issuer for settlement. All losses sustained by Licensee
as a result of non-payment on a Third Party Credit Card account shall be
borne solely by Licensee. Sears shall have no liability whatsoever to
Licensee for acceptance or rejection of a customer's Third Party Credit
Card charge.
Licensee may not distribute or solicit any customer applications or
referrals for any Third Party Credit Cards in or through the Licensed
Business. Other than Sears Cards, Third Party Credit Cards and RAL and
refund anticipation checks ("RAC"),
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Licensee shall not accept payment from customers under any other credit or
financing plan without the prior written consent of the Business
Development Manager.
9.3 Transactions.
Licensee shall be solely responsible for the collection and
reporting of Net Sales and payment of the Sears Fees associated with all
transactions not rung through the Sears POS System. The Sears Fees shall
be paid to Sears by the end of each month in which the Licensed Business
is conducted based upon the actual Licensed Business Net Sales received by
Licensee at such location during the corresponding month of the
immediately preceding year. At the end of each such month, the Net Sales
collected for the month, excluding the Net Sales generated through refund
anticipation loan withholding, and Sears Fees shall be calculated and
reported by Licensee to Sears and any adjustment to the estimated Sears
Fees shall be paid to Sears by Licensee by the end of the following month.
Final reports and adjustments to the Sears Fees shall be provided by
Licensee to Sears by June 15 of each year and any overpayment to Sears
shall be refunded to Licensee within thirty (30) days thereafter. In the
event that the Licensed Business was not operated at a Designated Sears
Store during the immediately preceding year, settlement as anticipated
above shall be amended to reflect that all settlements during the first
Tax Season shall be based upon actual receipts and no payment based upon
prior year actual Net Sales shall be made. All payments made by Licensee
shall be in the form of one payment for all Designated Sears Store
locations.
For the Sears Card sales through the Sears POS System, Sears shall
be solely responsible for reporting the Gross Sales and Net Sales,
calculation of the Sears Fees, and payment of all Gross Sales in excess of
the Sears Fees to Licensee on a location by location basis. At the end of
each month of service the Gross Sales collected and the Sears Fees due on
such revenue shall be calculated by Sears and all funds due Licensee shall
be paid by Sears. Reports and payments due shall be provided to Licensee
by Sears on or by the tenth (10th) of each month following the month in
which the payment was made and actual revenues collected.
For the Sears Card sales through the Sears POS System for Licensee
owned company stores, Sears shall be solely responsible for providing in
the month following in which the sales were processed 1) a detailed
electronic file, in a mutually agreed upon format. Reports will be
processed by the Sears financial month as shown below and 2) the payment
of such Net Sales as designated by Licensee on the Sears 4-4-5 reporting
schedule shown below.
For the Sears Card sales through the Sears POS System for Licensee's
franchisees, Sears shall be solely responsible for providing in the Sears
financial month following in which the sales were processed 1) a detailed
report on a location by location basis in a mutually agreed upon format
and 2) the payment of such Net Sales to each franchisee per the Sears
4-4-5 reporting schedule provided below.
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Sears 4-4-5 Reporting
1st workday Process "Z" Monthly Settlement Report and Payment
Request is submitted.
2nd workday Any needed adjustments to settlement posted by Sears
3rd workday Any needed adjustments to settlement posted by Sears
4th workday Prepare "320" transaction analysis for overnight
processing
5th workday Provide figure to Licensee (electronic file)
**All actual payments shall be made using current practices
In the event that Licensee is able during the Term to convert to a
real time data scenario whereby Licensee is capable of providing
settlement within two (2) business days after the end of the Sears retail
month, Sears shall accommodate such conversion.
9.4 Settlement.
Licensee shall reimburse Sears at each settlement for all invoiced
expenses, including any advertising expense, that were incurred by Sears
at Licensee's request, and are outstanding at the time of such settlement.
If Sears is not reimbursed at such settlement, then Sears shall have the
right to retain out of Licensee's sales receipts the amount of such
expenses with interest, if any, due Sears. Interest shall be at the rate
of prime (as published in the Wall Street Journal at the time of the
settlement) plus two percent (2%).
Test Stores Settlement - Licensee shall provide a one-time
adjustment at the end of the Tax Season for the Test Stores to reflect the
commission rate based upon the actual volume in the test locations.
In addition, any Net Sales and resulting Sears Fees reported to Sears
after June 15 of each calendar year shall be deemed late and shall be
subject to a late payment fee equal to ten percent (10%) of the unreported
Sears Fees due to Sears pursuant to Schedule 4 (the "Late Fee").
Additionally, any fees owed Licensee by Sears under the terms of this
Agreement (other than Sears Credit Card transactions) shall be deemed late
if not paid within thirty (30) days of receipt of invoice by Sears and
shall be subject to a late payment fee in an amount equal to ten percent
(10%) of the outstanding amount due Licensee from Sears.
9.5 Reports.
If requested by Sears, Licensee shall provide to Sears reports, in
the manner and form mutually agreeable to the parties, of sales by the
Licensed Business and Sears Fees paid, together with any other information
Sears may reasonably require. If requested by Sears, Licensee shall
promptly submit its financial report to Sears after the close of
Licensee's fiscal year. Such report shall be audited by a certified public
accountant. Such report shall include, but shall not be limited to,
Licensee's profit and loss statement for such fiscal year and balance
sheet at the end of such fiscal year, and shall be prepared
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in accordance with generally accepted accounting principles. If Licensee
is a publicly held corporation, this requirement may be fulfilled by
submission of Licensee's Annual Report or Form 10-▇. ▇▇▇▇▇ shall not
disclose to any third parties any such information which is not available
to the public without Licensee's prior consent.
9.6 Audit Rights.
Licensee shall keep and maintain, in accordance with generally
accepted accounting principles, books and records which accurately reflect
the Gross Sales and Net Sales of the Licensed Business, the expenses that
Licensee incurs in performing under this Agreement and payment of Sears
Fees. Sears shall have the right at any reasonable time to review and
audit such books and records; provided, however, that Sears shall not be
permitted to conduct an audit hereunder during Tax Season, and provided
further than only one such audit per location shall be permitted with
respect to each Tax Season.
9.7 Underreporting.
If any audit reveals that Gross Sales were under-reported by more
than three percent (3%) of the total Gross Sales reported by Licensee,
then Licensee shall reimburse Sears for all reasonable costs incurred in
performing such audit, as well as the Sears Fees on the unreported Gross
Sales discovered by the audit. If an audit of at least twenty (20)
Designated Sears Stores reveals that Gross Sales were under-reported by
more than three (3%) percent of the total Gross Sales reported by
Licensee, Licensee shall then, at its cost, conduct an additional audit
with a nationally representative sample; in the event such additional
audit reveals further under-reported Gross Sales, Licensee shall then, at
its option:
(a) pay (i) Sears Fees on all estimated unreported Gross Sales for
each year, as calculated by annualizing the rate by which Gross Sales were
under-reported in the audit sample and (ii) an administrative fee which
shall be calculated by multiplying the annualized underpaid Sears Fees by
the percent of under-reported Gross Sales; or
(b) pay (i) for a complete audit by Sears or its designee of
Licensee's books and records relating to Gross Sales for the audit sample
year and any other years under this Agreement, (ii) Sears Fees on all
actual unreported Gross Sales as revealed through such audit and (iii) an
administrative fee for each year audited, which will be calculated by
multiplying the amount of unpaid Sears Fees for such year by the
percentage by which Gross Sales were under-reported in such year.
If an audit reveals under-reported Gross Sales, Licensee's sales
shall be subject to a subsequent audit (at Licensee's expense)
approximately one year after the initial audit. If the subsequent audit
reveals that Gross Sales were under-reported by more than three percent
(3%) of reported Gross Sales, Licensee shall pay Sears Fees on such Gross
Sales as per the above except that, due to the increased expenses incurred
by Sears in continuing monitoring of Licensee's future sales reports, the
administrative fee shall be doubled.
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All under-reported sales equal to or less than three percent (3%) of
reported Gross Sales shall be reimbursed to Sears, as appropriate, based
on the actual amounts of such under-reports. Further, Sears may also
collect from Licensee interest on all unpaid Sears Fees for the period
from the close of the year in which the corresponding sales were made
until the date of payment of such Sears Fees. Interest shall be at the
rate of prime (as published in the Wall Street Journal as of the date of
the completion of the audit) plus two percent (2%).
9.8 Rights of Recoupment and Setoff.
Sears shall have the right, after prior written notice to Licensee,
to reduce, withhold or setoff against any payment due Licensee hereunder
any liability or obligation that Licensee may have to Sears or its
affiliates. Any Licensee liabilities or obligations which remain
outstanding after any exercise of Sears right of setoff shall be paid by
Licensee promptly upon demand by Sears. This Section 9.8 shall survive the
expiration or termination of this Agreement.
9.9 Check Cashing.
(a) Sears will, for a fee to the customer, cash refund anticipation
loan checks and electronic refund checks bearing the H&R Block name issued
by participating banks. Licensee will post signs in participating
locations disclosing the availability of check cashing services at
participating Sears stores. Prior to cashing any such check, Sears will
call the number set forth on Schedule 9.9(a) from time to time.
(b) In addition to the posting of signs in participating location
referred to above, brochures advising taxpayers that refund anticipation
loan checks and electronic refund checks may be cashed at and by
participating Sears locations will be included in the forms packet given
by Licensee to each customer. In response to specific inquiries made by
Licensee clients who have received refund anticipation loan checks or
electronic refund checks, Licensee will advise such clients that Sears
offers a check cashing service accepting refund anticipation loan checks
and electronic refund checks.
(c) Sears shall be solely responsible for compliance with any
licensing requirements that may apply to check cashing services.
(d) Licensee agrees to review annually with Sears those losses, if
any, sustained by Sears due to forged or unauthorized endorsements on
refund anticipation loan checks and/or electronic refund checks. In
addition, Licensee shall notify Sears promptly, in the manner set forth
herein, in the event that Licensee experiences any theft, misappropriation
or loss of any type of refund anticipation check and/or electronic refund
check (a "Fraud Event"). Licensee shall send written notice to Sears of
any Fraud Event ("Notice of Fraud"), which shall set forth the specifics
of the Fraud Event. Such Notice of Fraud shall be sent either via
facsimile or email to the person(s) identified by Sears prior to the start
of each Tax Season.
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(e) Nothwithstanding anything to the contrary in this Agreement,
Licensee shall indemnify, hold harmless and reimburse Sears promptly for
all refund checks paid out by Sears that are the subject of any Fraud
Event; provided, however, that Licensee shall not be obligated to
reimburse Sears for checks cashed by Sears (i) if Sears did not verify the
check as provided in Section 9.9(a) or (ii) more than twenty-four (24)
hours after receipt of the written Notice of Fraud by Sears. Sears agrees
that Sears will not seek recovery related to any Fraud Event from banks
participating in Licensee's electronic refund and refund anticipation loan
programs.
(f) Notwithstanding any obligation of Licensee set forth in Section
9.9(a), 9.9(b) or otherwise in this Agreement, Licensee shall not be
required to promote the check cashing services of Sears in any location
where the following conditions have been met:
(i) Licensee notifies the Sears Director of Business
Development in writing that Licensee reasonably believes that the
Check Cashing Fee charged by Sears is not competitive with fees
charged by other commercial check cashing services available in the
community served by the Designated Sears Store and such belief is
based upon a benchmarking survey conducted by Licensee of at least
three (3) commercial entities that provide a reasonable
representation of check cashing fees charged in the local geographic
area; and
(ii) Within five (5) business days from receipt of the notice
by the Store Manager, Sears does not change its fee to such amount
as Licensee reasonably believes is competitive with fees charged by
other commercial check cashing services available in the community
served by the Sears store.
In the event that Licensee ceases promotion of Sears check cashing
services pursuant to this subsection, Licensee shall not receive any
amount in Check Cashing Fees from Sears under Schedule 4.1 or otherwise
for checks cashed at such store(s) during any period when pursuant to this
subsection Licensee is not promoting Sears check cashing services as
required by subsections 9.9(a) and 9.9(b), and Sears shall have the right
to post its own signage regarding the check cashing services provided by
Sears.
10. CONFIDENTIALITY; CUSTOMER INFORMATION.
10.1 Confidential Business Information.
"Confidential Business Information" means any information, whether
disclosed in oral, written, visual, electronic or other form, which either
party discloses or observes in connection with any performance under this
Agreement. Confidential Business Information includes, but is not limited
to, business plans, strategies, forecasts and analyses; financial
information; employee and vendor information; software (including all
documentation and code); hardware and system designs, and protocols;
product and
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service specifications; purchasing, logistics, sales, marketing and other
business processes, and the terms and conditions of this Agreement.
All Confidential Business Information is the sole property of the
party owning same, and neither party acquires any rights in the
Confidential Business Information of the other party.
10.2 Treatment of Confidential Business Information.
The parties shall use Confidential Business Information only as
necessary to perform their respective obligations under this Agreement.
The Confidential Business Information of each party shall be held in
utmost confidence and shall not be disclosed to any third party. The
parties shall restrict disclosure of Confidential Business Information to
their affiliates and respective employees, directors, officers, agents
and/or professional advisers (collectively, "Representatives") who have a
need to know such information to perform under this Agreement and who have
first agreed to be bound by the terms of this Section 10. Each party is
liable for any unauthorized disclosure or use of Confidential Business
Information by any of its Representatives. Within ten (10) days following
expiration or termination of this Agreement, each party shall, either (a)
return the Confidential Business Information of the other party to the
other party or (b) certify in writing to the other that the Confidential
Business Information of the other party has been destroyed in such a
manner that it cannot be retrieved.
10.3 Exceptions to Confidential Treatment.
The obligations under this Section 10 do not apply to any
Confidential Business Information that:
(a) is or becomes publicly available without breach of this
Agreement;
(b) is independently developed by Licensee or Sears, as the case may
be, without use of any Confidential Business Information; or
(c) is received by Licensee or Sears, as the case may be, from a
third party that does not have an obligation of confidentiality to the
party purporting to own such Confidential Business Information.
Either party may disclose Confidential Business Information to the
extent that, in the reasonable opinion of such party's legal counsel, it
is legally required to be disclosed. The party intending to make such
disclosure shall notify the other party within a reasonable time prior to
disclosure and allow the other party a reasonable opportunity to seek
appropriate protective measures.
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10.4 Confidential Customer Information.
Licensee agrees that all information about Sears' individual
customers provided by Sears to Licensee, or provided to Licensee by a
Customer in connection with the use of a Sears Card (and not otherwise
provided to Licensee by the Customer in connection with Licensee's
provision of products or services to such Customer) (Confidential Customer
Information"), shall be deemed confidential. All Confidential Customer
Information is the sole property of Sears.
However, all completed tax return forms and the information
contained in any such returns shall not be disclosed to Sears at any time,
and shall remain the sole property of Licensee. Sears shall also not
access or attempt to access any completed Licensee customer forms,
information or documents maintained by Licensee in a Licensed Business
Area. If Sears inadvertently comes into possession of completed tax return
forms or related documents of Licensee customers, Sears agrees to promptly
notify Licensee and return such forms and documents to Licensee, and not
to use any such information for any purpose whatsoever.
10.5 Treatment of Confidential Customer Information.
(a) Licensee shall use or disclose Confidential Customer
Information only as necessary to perform its obligations under this
Agreement. Licensee shall restrict disclosure of Confidential
Customer Information to its Representatives who have a need to know
such information to perform the Services and who have first agreed
to be bound by the terms of this Section 10.4. Licensee is liable
for any unauthorized disclosure or use of Confidential Customer
Information by any of its Representatives.
(b) Unless otherwise prohibited by law, Licensee shall (i)
immediately notify Sears of any legal process served on Licensee for
the purpose of obtaining Confidential Customer Information and (ii)
permit Sears adequate time to exercise its legal options to prohibit
or limit such disclosure. Licensee shall implement appropriate
measures designed to meet the following objectives: (i) ensure the
security and confidentiality of Confidential Customer Information;
(ii) protect against any anticipated threats or hazards to the
security or integrity of such information; and, (iii) protect
against unauthorized access to or use of such information that could
result in substantial harm or inconvenience to the person about whom
the Confidential Customer Information refers.
(c) Within ten (10) days following expiration or termination
of this Agreement, Licensee shall, upon Sears request, (i) return
the Confidential Customer Information to Sears or (ii) certify in
writing to Sears that such Confidential Customer Information has
been destroyed in such a manner that it cannot be retrieved.
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(d) Licensee shall notify Sears promptly upon the discovery of
the loss, unauthorized disclosure, unauthorized access, or
unauthorized use of the Confidential Customer Information and shall
indemnify Sears and hold Sears harmless for such loss, unauthorized
disclosure, unauthorized access, or unauthorized use, including
attorney's fees.
(e) Licensee shall permit Sears to audit Licensee's compliance
with the provisions of this Section 10.4 at any time during
Licensee's regular business hours.
(f) In addition to any other rights Sears may have under this
Agreement or in law, since unauthorized use, access, or disclosure
of the Confidential Customer Information may result in immediate and
irreparable injury to Sears for which monetary damages may not be
adequate, in the event Licensee or any officer, director, employee,
agent or subcontractor of Licensee uses or discloses or in Sears
sole opinion, any such party is likely to use or disclose the
Confidential Customer Information in breach of Licensee's
obligations under this Agreement or, in Sears sole opinion there has
been a breach to the security, confidentiality, or integrity of the
Confidential Customer Information, Sears shall be entitled to
equitable relief, including temporary and permanent injunctive
relief and specific performance. Sears shall also be entitled to the
recovery of any pecuniary gain realized by Licensee from the
unauthorized use or disclosure of the Confidential Customer
Information.
10.6 Post-Termination Obligation.
The provisions of Section 10 shall survive the expiration or
termination of this Agreement.
11. RELATIONSHIP OF PARTIES.
Licensee is an independent contractor. Nothing contained in or done
pursuant to this Agreement shall be construed as creating a partnership,
agency or joint venture, and neither party shall become bound by any
representation, act or omission of the other party.
12. DEFENSE AND INDEMNITY.
12.1 Defense.
(a) Licensee's Defense Obligations. Licensee shall defend, at its
own expense, all allegations of whatever nature asserted in any claim,
action, lawsuit or proceeding (even though such allegations may be false,
fraudulent or groundless) against Sears, its affiliates and subsidiaries
and/or their respective directors, officers, employees, agents and
independent contractors (collectively, the "Sears Indemnified Parties")
actually or
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allegedly resulting from, arising out of, connected with or incidental to
the establishment, construction or operation of the Licensed Business,
expressly and specifically including, without limitation of the foregoing,
any of the following: unauthorized representation, misrepresentation,
claims for benefits under any workers' compensation law, injury to or
death of persons, unlawful trade practices, the infringement, misuse,
dilution, misappropriation, or other violation of any patent, trademark,
service ▇▇▇▇, trade name, trade dress, copyright, trade secret, domain
name, right of publicity or other intellectual property right, damage to
property allegedly or actually suffered by any person or persons, or the
commission or omission of any act, lawful or unlawful, by Licensee, its
affiliates and subsidiaries and/or their respective directors, officers,
employees, agents or independent contractors, whether or not such act is
within the scope of the authority or employment of such persons and
whether or not Licensee's indemnity obligations under Section 12.2 apply
(collectively, the "Sears Claims").
Licensee shall use counsel satisfactory to Sears in the defense of
all Sears Claims. Sears may, at its election, take control of the defense
and investigation of any Sears Claims and may employ and engage attorneys
of its own choice to manage and defend such Sears Claims, at Sears' risk
and expense. If Licensee negotiates a settlement of any such Sears Claim,
such settlement shall be subject to Sears' prior written approval.
(b) Sears' Defense Obligations. Sears shall defend, at its own
expense, all allegations of whatever nature asserted in any claim, action,
lawsuit or proceeding (even though such allegations may be false,
fraudulent or groundless) against Licensee, its affiliates and
subsidiaries and/or their respective directors, officers, employees,
agents and independent contractors (collectively, the "Licensee
Indemnified Parties") actually or allegedly resulting from, arising out
of, connected with or incidental to the operation of a Designated Sears
Store, expressly and specifically including, without limitation of the
foregoing, any of the following: unauthorized representation,
misrepresentation, injury to or death of persons, unlawful trade
practices, the infringement, misuse, dilution, misappropriation, or other
violation of any patent, trademark, service ▇▇▇▇, trade name, trade dress,
copyright, trade secret, domain name, right of publicity or other
intellectual property right, damage to property allegedly or actually
suffered by any person or persons, or the commission or omission of any
act, lawful or unlawful, by Sears, its affiliates and subsidiaries and/or
their respective directors, officers, employees, agents or independent
contractors, whether or not such act is within the scope of the authority
or employment of such persons and whether or not Sears' indemnity
obligations under Section 12.2 apply (collectively, the "Licensee
Claims").
Sears shall use counsel satisfactory to Licensee in the defense of
all Licensee Claims. Licensee may, at its election, take control of the
defense and investigation of any Licensee Claims and may employ and engage
attorneys of its own choice to manage and defend such Licensee Claims, at
Licensee's risk and expense. If Sears negotiates a settlement of any such
Licensee Claim, such settlement shall be subject to Licensee's prior
written approval.
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12.2 Indemnity.
(a) Licensee's Indemnity Obligations. Licensee shall hold harmless
and indemnify the Sears Indemnified Parties from and against any and all
claims, damages, demands, actions, lawsuits, proceedings, liabilities,
losses, costs and expenses (including but not limited to fees and
disbursements of counsel) resulting from, arising out of, connected with
or incidental to the establishment, construction or operation of the
Licensed Business, expressly and specifically including, without
limitation of the foregoing, any of the following: unauthorized
representation, misrepresentation, claims for benefits under any workers'
compensation law, injury to or death of persons, unlawful trade practices,
the infringement, misuse, dilution, misappropriation, or other violation
of any patent, trademark, service ▇▇▇▇, trade name, trade dress,
copyright, trade secret, domain name, right of publicity or other
intellectual property right, damage to property allegedly or actually
suffered by any person or persons, or the commission or omission of any
act, lawful or unlawful, by Licensee, its affiliates and subsidiaries
and/or their respective directors, officers, employees, agents or
independent contractors, whether or not such act is within the scope of
the authority or employment of such persons. The provisions of this
Section 12.2 shall not apply to the extent any injury or damage is
determined to have been caused solely by Sears' gross negligence or
willful misconduct.
Licensee agrees to protect, defend, hold harmless and indemnify Sears from
and against any and all claims, demands, damages, expenses (including
reasonable attorney's fees), losses, actions, causes of action, judgments,
fines, penalties, fees, suits and proceedings of any kind whatsoever
actually or allegedly resulting from or connected with any dispute between
Licensee and its franchise operators in connection with the conduct and
operation of said Licensed Business hereunder or arising out of agreements
between Licensee and such franchise operators. Notwithstanding anything
contained in the foregoing, Licensee shall not be required to indemnify
Sears for any claims, demands, damages, expenses (including attorney's
fees), losses, actions, causes of action, judgments, fines, penalties,
fees, suits and proceedings which are caused by the gross negligence of
Sears, its agents or employees.
(b) Sears' Indemnity Obligations. Sears shall hold harmless and
indemnify the Licensee Indemnified Parties from and against any and all
claims, damages, demands, actions, lawsuits, proceedings, liabilities,
losses, costs and expenses (including but not limited to fees and
disbursements of counsel) resulting from, arising out of, connected with
or incidental to the establishment, construction or operation of a
Designated Sears Store, expressly and specifically including, without
limitation of the foregoing, any of the following: unauthorized
representation, misrepresentation, injury to or death of persons, unlawful
trade practices, the infringement, misuse, dilution, misappropriation, or
other violation of any patent, trademark, service ▇▇▇▇, trade name, trade
dress, copyright, trade secret, domain name, right of publicity or other
intellectual property right, damage to property allegedly or actually
suffered by any person or persons, or the commission or omission of any
act, lawful or unlawful, by Sears, its affiliates and subsidiaries and/or
their respective directors, officers, employees, agents or independent
contractors, whether
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or not such act is within the scope of the authority or employment of such
persons. The provisions of this Section 12.2 shall not apply to the extent
any injury or damage is determined to have been caused solely by
Licensee's gross negligence or willful misconduct.
12.3 Survival.
The provisions of this Section 12 shall survive the expiration or
termination of this Agreement.
13. INSURANCE
13.1 Types of Insurance.
Licensee shall, at its own expense, obtain and maintain in full
force and effect at all times during the term of this Agreement, policies
of insurance with insurance companies licensed to do business in the state
where the services are to be performed, who shall have a rating of
"A-/VII" or better by the then current edition of Best Insurance Reports
published by A.M. Best Company and shall be reasonably satisfactory to
Sears and shall name Sears as an additional insured. These policies shall
conform to the following:
(a) Commercial General Liability with coverage including, but not
limited to, premises/operations, products/completed operations,
contractual and personal/advertising injury liabilities, with combined
single limits of not less than One Million Dollars ($1,000,000) per
occurrence with at least One Million Dollars ($1,000,000) aggregate per
location for bodily injury and property damage.
(b) Motor Vehicle Liability insurance with coverage for all owned,
non-owned and hired vehicles with combined single limits of not less than
One Million Dollars ($1,000,000) per occurrence for bodily injury and
property damage. If only private passenger autos are used, a limit of Five
Hundred Thousand Dollars ($500,000) per occurrence is acceptable. If no
vehicles are owned or leased, the Commercial General Liability insurance
shall be extended to provide insurance for non-owned and hired vehicles.
(c) Workers' Compensation insurance, including coverage for all
costs, benefits and liabilities under Workers' Compensation and similar
laws which may accrue in favor of any person employed by Licensee for all
states in which the Licensed Business is located with a waiver of
subrogation in favor of Sears where permitted by law, and Employer's
Liability insurance with limits of not less than One Hundred Thousand
Dollars ($100,000) per accident or disease and Five Hundred Thousand
Dollars ($500,000) aggregate by disease. Licensee warrants that its
subcontractors will maintain Workers' Compensation and Employer's
Liability insurance with limits not less than those set forth in this
Section.
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(d) "All Risk" Property Insurance on a "Cause of Loss - Special
Form" with coverage for all perils, including fire, extended coverage,
windstorm, vandalism, malicious mischief, sprinkler leakage, water damage,
accidental collapse, flood and earthquake, for the full replacement value
of the property with limits equal to the maximum value, at any one time,
of such property and with a coverage extension for increased cost of
construction, including a waiver of subrogation in favor of Sears.
(e) Professional Liability or Errors and Omissions Insurance with
coverage for claims arising out of Licensee's rendering of or failure to
render professional services with limits of not less than Ten Million
Dollars ($10,000,000) per claim.
(f) Fidelity Insurance covering employee dishonesty with limits of
not less than One Hundred Thousand Dollars ($100,000) per claim.
13.2 No Cancellation Without Notice/Excess Coverage.
All of the insurance shall be in the name of Licensee and shall
further provide that the policies shall not be cancelled or materially
changed without at least thirty (30) days' prior written notice to Sears
Certificate Management Services, c/o Insurance Data Services, ▇.▇. ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or other address of which Licensee is
notified by Sears. Licensee may satisfy the required limits of liability
for the insurance by any combination of primary liability and umbrella
excess liability coverage.
13.3 Certificates.
Licensee shall furnish Sears with certificates of insurance
evidencing this coverage and, at Sears' request, copies of policies, prior
to execution of this Agreement and upon each policy renewal during the
Term of this Agreement. If Licensee does not provide Sears with such
certificates of insurance or, in Sears' opinion, such policies do not
afford adequate protection for Sears, Sears shall so advise Licensee. If
Licensee does not furnish evidence of acceptable coverage within five (5)
days after notification by Sears that policies are not sufficient, Sears
shall have the right to immediately terminate this Agreement upon written
notice to Licensee.
13.4 Expiration/Non-Renewal.
If Licensee's policies of insurance expire or are canceled during
the Term of this Agreement or are materially modified, Licensee shall
promptly notify Sears of such expiration, cancellation or material
modification. If such policies of insurance are materially modified such
that, in Sears' opinion, such policies do not afford adequate protection
to Sears, Sears shall so advise Licensee. If Licensee does not furnish
evidence of acceptable replacement coverage within five (5) days after the
expiration or cancellation of coverage or the notification from Sears that
modified policies are not sufficient, Sears shall have the right, at its
option, to immediately terminate this Agreement upon written notice to
Licensee.
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13.5 No Waiver.
Any approval by Sears of any of Licensee's insurance coverage shall
not relieve Licensee of any responsibility under this Agreement, including
but not limited to liability for claims in excess of described limits or
liabilities and any costs or injuries not covered by such insurance.
14. TERMINATION
14.1 Mutual Right of Termination.
Neither party shall terminate a Designated Sears Store location
without cause during the Tax Season. Terminations without cause of
Designated Sears Store locations outside of the Tax Season shall be
addressed as part of the annual October 1 mutually agreed listing of
Designated Sears Store locations.
14.2 Termination by Sears upon Default by Licensee.
Sears may terminate this Agreement immediately upon delivery of
written notice of such termination to Licensee upon the occurrence of any
of the following (each a "Default"):
(a) Licensee abandons or fails to actively operate the License
Business or fails to commence operation of the Licensed Business as
required in Section 6.4 of this Agreement;
(b) there is a Change in Control (as defined in Section 15.1 below)
with respect to Licensee to which Sears has not consented;
(c) Licensee or any director or officer of Licensee is convicted of
or pleads no contest to a felony, or engages in any conduct that is likely
to adversely affect the reputation of Licensee, the Licensed Business or
Sears;
(d) Licensee fails to secure and maintain appropriate insurance
coverage as set forth in Section 13;
(e) Licensee fails to pay its bills as they become due, the current
liabilities of Licensee exceed its current assets, a petition is filed
either by or against Licensee in any bankruptcy or insolvency proceeding,
or any property of Licensee passes into the hands of any receiver,
assignee, officer of the law or creditor; or
14.3 Termination After Opportunity to Cure.
Either party may terminate this Agreement if the other party:
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(a) fails to make payment of any amounts due the other party, and
does not correct such failure within ten (10) days after written notice of
such failure is delivered to the breaching party; or
(b) fails to comply with any other provision of this Agreement or
any mandatory specification, standard or operating procedure prescribed
herein and does not correct such failure within thirty (30) days after
written notice of such failure is delivered to the breaching party; or
(c) makes any unauthorized use, duplication or disclosure of the
other party's Confidential Business Information or Confidential Customer
Information; or
(d) materially misuses or makes an unauthorized use of the other
party's Marks.
14.4 Termination on Store Closing or Casualty.
Sears may, in its sole discretion, terminate this Agreement with
respect to any affected Licensed Business Area due to the closing of the
Designated Sears Store. Licensee shall not be entitled to any notice of
such store closing prior to a public announcement of such closing.
Licensee waives any claim it may have against Sears for damages, if any,
incurred as a result of such closing.
If any Designated Sears Store is damaged by fire or any other
casualty so that the Licensed Business Area becomes untenantable, this
Agreement may be terminated with respect to such Licensed Business Area,
without penalty and without liability for any damages as a result of such
termination, effective as of the date of such casualty, by either party
giving the other party written notice of such termination within twenty
(20) days after the occurrence of such casualty. If such notice is not
given, then this Agreement shall not terminate but shall remain in full
force and effect, and the parties shall cooperate with each other so that
Licensee may resume operation of the Licensed Business as soon as
possible.
14.5 Effect of Termination.
Upon expiration or termination of this Agreement, the parties shall
immediately pay all amounts owed to the other, shall cease use of all
marks and Licensed Business Marks, either return or destroy all
Confidential Business Information and all Confidential Customer
Information as directed by Sears in accordance with Section 10 and, at
Licensee's expense, Licensee shall immediately remove all of Licensee's
Equipment from Sears' premises and repair any damage to Sears' premises
caused by such removal. Upon the expiration or termination of this
Agreement, the expense to return the Licensed Business Area to its
condition when Sears made it ready for use by Licensee shall be allocated
in accordance with Schedule 6.2.
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14.6 Survivability.
No expiration or termination of this Agreement shall relieve the
parties of obligations arising before expiration or termination or of any
obligations that survive expiration or termination of this Agreement.
15. ASSIGNMENT.
15.1 Assignment by Licensee.
Notwithstanding any other provision contained in this Agreement,
Licensee may not assign, transfer, sublicense or convey any of its rights
or obligations under this Agreement, in whole or in part, without Sears'
prior written consent. Any Change in Control of Licensee shall constitute
an assignment of this Agreement, for which Sears' prior written consent is
required. Any attempted assignment, transfer, sublicense, conveyance or
Change in Control without Sears' prior written consent is void.
For purposes of this Agreement, a "Change in Control" means an asset
sale, merger, consolidation, or any other transaction or arrangement the
effect of which is that fifty percent (50%) or more of the total voting
power entitled to vote in the election of Licensee's board of directors is
held by a person or persons other than the shareholders of Licensee, who,
individually or as a group, held fifty percent (50%) or more of such
voting power immediately prior to such event.
Licensee agrees that (i) this Agreement cannot be assumed in any
case under Title 11 of the United States Code, and (ii) it hereby waives
its rights to object to any motion to lift the automatic stay of 11 USC
Sec. 362 in any proceeding wherein Sears or its affiliates seek to recoup,
set off or enforce any other provisions of this Agreement.
15.2 Assignment by Sears.
Sears may assign any of its rights and obligations under this
Agreement to any other party.
15.3 Binding Nature.
The provisions of this Agreement shall be binding upon Licensee and
its successors and permitted assigns and shall be binding upon and inure
to the benefit of Sears and its successors and assigns.
16. MISCELLANEOUS.
16.1 Choice of Law.
This Agreement is governed by Illinois law, excluding its conflicts
of law rules.
41
16.2 Jurisdiction and Venue.
Licensee irrevocably consents and submits to venue and exclusive
subject matter and personal jurisdiction in the federal and/or state
courts in ▇▇▇▇ County, Illinois for any dispute arising out of this
Agreement and waives all objections to jurisdiction and venue of such
courts.
16.3 Notices.
Notices under this Agreement shall be in writing and are sufficient
if given by nationally recognized overnight courier service, certified
mail (return receipt requested, postage prepaid), facsimile with
electronic confirmation (provided a confirmation copy is also sent no
later than the next business day by first-class mail, return receipt
requested, postage prepaid) or personal delivery to the other party at the
address below:
If to Sears: Sears, ▇▇▇▇▇▇▇ and Co.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, Mail Station: ▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: Business Development Manager
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Sears, ▇▇▇▇▇▇▇ and Co.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, Mail Station: ▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: Senior Paralegal, Contracts Manager
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Licensee: __________________________________________
__________________________________________
__________________________________________
__________________________________________
Attn.: ___________________________________
Facsimile: ( )
Notice is effective: (i) on the business day after sent by a
nationally recognized overnight courier service, (ii) three (3) business
days after sent by certified mail, (iii) on the next business day after it
is sent by facsimile with electronic confirmation, or (iv) when delivered
personally. A party may change its notice address by giving notice in
accordance with this Section 16.3.
16.4 Severability.
If any provision of this Agreement is determined to be
unenforceable, the parties intend that this Agreement be enforced as if
the unenforceable provisions were not present and that any partially valid
and enforceable provisions be enforced to the extent that they are
enforceable.
42
16.5 No Waiver.
A party does not waive any right under this Agreement by failing to
insist on compliance with any of the terms of this Agreement or by failing
to exercise any right hereunder. Any waivers granted hereunder are
effective only if recorded in a writing signed by the party granting such
waiver.
16.6 Cumulative Rights.
The rights and remedies of the parties under this Agreement are
cumulative, and either party may enforce any of its rights or remedies
under this Agreement or other rights and remedies available to it at law
or in equity.
16.7 Construction.
The section headings of this Agreement are for convenience only and
have no interpretive value. This Agreement may be executed in
counterparts, which together will constitute one and the same Agreement.
16.8 Survival.
In addition to all other provisions expressly providing that they
survive any expiration or termination of this Agreement, this Section 16
shall survive any expiration or termination of this Agreement.
16.9 Entire Agreement; Modifications.
This Agreement, together with all Schedules referred to herein,
which are incorporated by this reference, constitute the complete and
final agreement of the parties pertaining to the Licensed Business and
supersede all of the parties' prior agreements, understandings and
discussions relating to the Licensed Business. No modification or
amendment of this Agreement is binding unless it is in writing and signed
by Sears and Licensee.
IN WITNESS WHEREOF, the parties have caused their respective duly authorized
representatives to execute this Agreement effective as of the Effective Date.
SEARS, ▇▇▇▇▇▇▇ AND CO.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
Its: Vice President and General Manager,
Licensed Businesses
H&R BLOCK SERVICES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
43
Its: Senior Vice President, National Operations
44
SCHEDULE 1.1A
AUTHORIZED MERCHANDISE AND/OR SERVICES
The following items, merchandise lines and/or services are authorized for sale
by Licensee in the Licensed Business:
1. Income Tax preparation service
2. Electronic filing services consisting of: (1) the electronic transmission
for eligible customers of income tax data to appropriate taxing
authorities (such service is offered under Licensee's trademark, "Rapid
Refund"); (2) arranging "refund anticipation loans" ("RALs"), for
customers who use Licensee's Rapid Refund service and who meet the credit
requirements of a lending institution selected by Licensee; and (3) other
services related to the electronic filing of income tax returns.
3. Tax Classes
4. "Peace of Mind" Program
5. Other Services - The services set forth below shall only be offered at
Designated Sears Stores operated by Licensee, not by any sublicensee or
franchisee of Licensee. In addition, the funding of these services shall
not be placed on a Sears Card.
- Express IRAs
- Financial Services accounts
- Mortgages
Any form 7216 required for these services shall contain the following
language:
"H&R Blocks' family of affiliated companies are offering a variety
of financial services for your convenience. Sears, ▇▇▇▇▇▇▇ and Co.
is not offering any financial services. Sears, ▇▇▇▇▇▇▇ and Co. is
not a registered broker/dealer."
45
SCHEDULE 1.1B
DESIGNATED SEARS STORES
REGION DISTRICT STORE # STORE NAME
------ -------- ------- ----------
9020 250 1001 WESTMINSTER - A
9023 284 1003 SALEM - A
9023 286 1004 GARDEN CITY - A
9028 276 1005 LAKE WALES - A
9028 275 1006 OCALA - A
9028 237 1007 ▇▇▇▇▇▇▇ - A
9025 240 1008 LOS ANGELES/▇▇▇▇▇ - A
9025 243 1009 SEATTLE/1ST AVE - A
9022 260 1010 CHICAGO-▇▇▇▇▇▇▇▇ - A
9022 264 1011 GRANDVILLE - A
9020 291 1012 DES MOINES - A
9023 280 1013 ▇▇▇▇ BURNIE - A
9023 289 1014 ENFIELD - A
9028 276 1015 VERO BEACH - A
9027 262 1016 LITTLE ROCK-A
9027 258 1017 HOUSTON/MAIN - A
9025 240 1018 LOS ANGELES/▇▇▇▇▇▇▇ HLS-A
9025 246 1019 PLEASANTON - A
9022 294 1020 CHICAGO-79TH ST-A
9020 291 1022 OMAHA - A
9023 281 1023 DULLES/LOUDOUN CNTY-A
9023 281 1024 FALLS CHURCH - A
9028 274 1025 DANVILLE - A
9027 262 1026 MEMPHIS/RALEIGH SPRINGS-A
9027 235 1027 EL PASO/SUNLAND PK - A
9025 240 1028 HOLLYWOOD - A
9020 292 1029 SPOKANE - A
9022 294 1030 CHICAGO-WESTERN-A
9020 250 1031 DENVER/CHERRY CREEK-A
9020 252 1032 BROOKLYN CTR-A
9023 285 1033 N ATTLEBORO - A
9022 273 1034 PITTSBURGH/▇▇▇▇ ▇▇▇▇-A
9028 239 1035 AUGUSTA - A
9020 292 1038 SPOKANE - A
9025 246 1039 OAKLAND - A
9020 259 1040 EAU CLAIRE A
46
9020 291 1041 OMAHA-A
9027 255 1042 JOPLIN - A
9023 289 1043 MERIDEN - A
9023 288 1044 JERSEY CTY/NEWPORT - A
9028 238 1045 DURHAM - A
9025 240 1048 PASADENA - A
9025 244 1049 PORTLAND - A
9020 252 1050 MOLINE - A
9022 271 1051 STRONGSVILLE - A
9020 252 1052 ST ▇▇▇▇-A
9023 285 1053 SAUGUS - A
9028 277 1055 CORAL SPRINGS - A
9027 269 1056 MOBILE - A
▇▇▇▇ ▇▇▇ 1057 DALLAS/VALLEY VIEW-A
9025 243 1059 SEATTLE/SHORELINE - A
9020 259 1062 BROOKFIELD-A
9023 289 1063 WEST HARTFORD - A
9023 287 1064 LANGHORNE/OXFORD VLY-A
9028 282 1065 ▇▇▇▇ ▇▇▇▇▇(RICHMOND) - A
9028 275 1066 JACKSONVILLE(AVES)-A
9027 258 1067 HOUSTON/MEMORIAL-A
9025 240 1068 PALMDALE - A
9025 243 1069 REDMOND-OVERLAKE PARK - A
9020 250 1071 LAKEWOOD/DENVER - A
9023 287 1073 EXTON - A
9023 281 1074 WALDORF/ST ▇▇▇▇▇▇▇ - A
9028 276 1075 DAYTONA BEACH - A
9027 234 1076 LEWISVILLE - A
9027 257 1077 SHREVEPORT - A
9025 251 1078 MESA/EAST - A
9025 244 1079 PORTLAND-WASHINGTON SQ -
9027 257 1080 FRISCO - A
9022 267 1081 HEATH - A
9020 259 1082 GREENDALE-A
9023 285 1083 WARWICK - A
9023 287 1084 PHILA-GREATER NE-A
9028 278 1085 CAGUAS - A
9027 263 1086 BATON ROUGE - A
9027 258 1087 HOUSTON/WEST OAKS - A
9025 240 1088 GLENDALE - A
9025 243 1089 ANCHORAGE(SUR) - A
9022 260 1090 CHICAGO-HARLEM AVE - A
9027 255 1091 OKLAHOMA CITY/SEQUOYAH -
9022 265 1092 WESTLAND(DETROIT) - A
47
9023 289 1093 SPRINGFIELD - A
9023 288 1094 HACKENSACK - A
9028 270 1095 DOUGLASVILLE - A
9027 269 1096 PENSACOLA - A
9027 256 1097 SAN ANTONIO - A
9025 233 1098 CLOVIS - A
9025 243 1099 FEDERAL WAY - A
9022 265 1100 FLINT-A
9020 254 1101 OVERLAND PARK-A
9023 283 1103 ALBANY - A
9023 285 1104 MARLBOROUGH - A
9028 276 1105 OCOEE - A
9027 263 1106 ▇▇▇▇▇▇▇ - A
9025 247 1108 TEMECULA - A
9025 243 1109 LYNNWOOD - A
9022 264 1110 PORTAGE-A
9020 250 1111 COLORADO SPRINGS - A
9020 252 1112 MINNETONKA-A
9023 286 1114 BROOKLYN/▇▇▇▇▇▇▇ RD - A
9028 268 1115 CHATTANOOGA - A
9027 257 1116 MONROE - A
9020 249 1118 SALT LAKE CITY - A
9025 244 1119 PORTLAND - A
9022 267 1120 COLUMBUS - A
9020 254 1121 INDEPENDENCE-A
9020 252 1122 MAPLEWOOD-A
9023 285 1123 DEDHAM - A
9023 286 1124 BAY SHORE - A
9028 277 1125 MIAMI/CORAL GABLES-A
9027 269 1126 ▇▇▇▇▇▇▇▇▇▇ - A
9027 258 1127 HOUSTON SHEPHERD - A
9025 243 1129 TACOMA - A
9020 250 1131 LITTLETON-DENVER - A
9020 252 1132 BURNSVILLE-A
9023 289 1133 LEOMINSTER - A
9023 289 1134 MILFORD - A
9027 269 1136 BIRMINGHAM/RIVERCHASE-A
9027 256 1137 AUSTIN - A
9025 243 1139 TUKWILA - A
9022 264 1140 GRAND RAPIDS-A
9020 250 1141 AURORA - A
9020 252 1142 EDEN PRAIRIE-A
9023 286 1143 BROOKLYN/KINGS PLZ - A
9027 269 1145 COLUMBUS - A
48
9027 262 1146 ▇▇▇▇▇▇▇/MEMPHIS/GERMANTWN
9027 263 1147 BATON ROUGE - A
9025 233 1148 VENTURA - A
9025 248 1149 WHITTIER - A
9022 267 1150 COLUMBUS-WESTLAND-A
9022 273 1152 STEUBENVILLE-A
9023 290 1154 WHITEHALL - A
9028 270 1155 KENNESAW - A
9025 245 1156 ROSEVILLE - A
9025 241 1158 HONOLULU(SUR) - A
9025 245 1159 FAIRFIELD - A
9020 254 1161 WICHITA-TOWN EAST SQ-A
9022 272 1162 AMHERST - A
9023 285 1163 BURLINGTON - A
9028 274 1165 CONCORD - A
9027 269 1166 MERIDIAN - A
9027 256 1167 SAN ANTONIO CENTRAL PARK
9025 240 1168 NO HOLLYWOOD-LA VALLEY -
9025 251 1169 ▇▇▇▇▇▇▇▇ - A
9022 264 1170 LANSING - A
9027 255 1171 SPRINGFIELD - A
9022 260 1172 BLOOMINGDALE - A
9023 287 1174 UPPER ▇▇▇▇▇ - A
9028 276 1175 ▇▇▇▇▇▇▇ ISLAND - A
9027 258 1176 PASADENA - A
9025 240 1178 SANTA ▇▇▇▇▇▇
9025 240 1179 CANOGA PK/TOPANGA PLZ-A
9022 265 1180 WATERFORD(PONTIAC)-A
9020 254 1181 KANSAS CITY-A
9020 261 1182 ST ▇▇▇▇▇▇ - A
9028 268 1185 ASHEVILLE-A
9027 262 1186 MEMPHIS/POPLAR - A
9027 257 1187 MESQUITE-TOWN EAST - A
9025 248 1189 WEST COVINA - A
9022 264 1192 MUSKEGON - A
9023 289 1193 WATERFORD - A
9028 277 1195 FT LAUDERDALE - A
9027 258 1197 HOUSTON-WESTWOOD-A
9025 246 1199 SAN MATEO - A
9022 294 1200 CHICAGO/STATE ST - A
9022 267 1202 BEAVERCREEK/DAYTON - A
9023 288 1204 FREEHOLD - A
9028 277 1205 POMPANO BEACH - A
9027 262 1206 NORTH LITTLE ROCK - A
49
9027 257 1207 ▇▇▇▇▇▇▇▇▇▇ - A
9025 233 1208 FRESNO - A
9025 248 1209 LONG BEACH - A
9022 267 1210 COLUMBUS/POLARIS - A
9027 255 1211 OKLAHOMA CTY-QUAIL SPRGS-
9022 260 1212 NORTH RIVERSIDE - A
9023 289 1213 AUBURN - A
9027 262 1216 MEMPHIS/SOUTHLAND - A
9027 256 1217 CORPUS CHRISTI - A
9022 231 1220 TOLEDO-A
9020 250 1221 COLORADO SPRINGS - A
9020 261 1222 ST LOUIS/SOUTH CNTY - A
9023 285 1223 BROCKTON - A
9023 290 1224 HARRISBURG - A
9028 276 1225 ORLANDO COLONIAL - A
9027 263 1226 METAIRIE NW ORLNS - A
9027 234 1227 DALLAS-SW CENTER-A
9025 245 1228 SACRAMENTO-ARDEN -A
9020 249 1229 BOISE - A
9020 252 1232 ▇▇▇▇ RAPIDS - A
9027 255 1236 TULSA - A
9027 258 1237 HOUSTON GREENSPOINT -A
9025 246 1238 MOUNTAIN VIEW - A
9023 285 1243 HANOVER - A
9023 290 1244 YORK/GALLERIA - A
9027 235 1247 LUBBOCK - A
9025 246 1248 HAYWARD - A
9022 265 1250 LINCOLN PARK-A
9028 270 1251 LITHONIA - A
9023 285 1253 PEABODY - A
9023 287 1254 WILMINGTON - A
9028 237 1255 TAMPA/CITRUS PK- A
9027 258 1257 FRIENDSWD HSTON BAYBRK -
9027 255 1261 MIDWEST CITY - A
9023 289 1263 WATERBURY - A
9023 286 1264 HICKSVILLE - A
9028 282 1265 VIRGINIA BEACH - A
9027 269 1266 BIRMINGHAM-CENTURY PLZ -A
9027 234 1267 FT WORTH RIDGMAR
9025 248 1268 BUENA PARK - A
9020 261 1270 ST LOUIS/CRESTWOOD - A
9020 250 1271 LITTLETON/DENVER SW-A
9023 289 1273 HOLYOKE - A
9028 282 1274 RICHMOND/CHESTERFIELD - A
50
9028 270 1275 ATLANTA/NORTHLAKE-A
9027 236 1276 BELLEVUE/NASHVILLE - A
9027 256 1277 SAN ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ -A
9025 240 1278 TORRANCE - A
9022 293 1280 SPRINGDALE-A
9020 250 1281 PUEBLO - A
9023 285 1283 BRAINTREE - A
9023 281 1284 ALEXANDRIA - A
9028 276 1285 ORLANDO-SOUTH-A
9027 263 1286 GRETNA - A
9027 235 1287 ALBUQUERQUE - A
9025 245 1288 STOCKTON - A
9022 260 1290 NILES-A
9022 273 1293 ▇▇▇▇▇▇▇▇ TWNSHP-A
9023 288 1294 WATCHUNG - A
9028 237 1295 ST PETERSBURG - A
9027 234 1297 ▇▇▇▇▇ -A
9025 247 1298 RIVERSIDE - A
9022 260 1300 OAK BROOK-A
9020 249 1301 PROVO - A
9023 289 1303 DANBURY - A
9023 281 1304 SILVER SPRING - A
9028 275 1305 SAVANNAH - A
9027 263 1306 HATTIESBURG - A
9027 234 1307 ABILENE - A
9025 248 1309 ▇▇▇▇▇▇ - A
9022 271 1310 ELYRIA - A
9023 284 1313 NASHUA - A
9023 288 1314 NEW BRUNSWICK - A
9028 268 1315 CHATTANOOGA(NORTHGATE)-A
9027 236 1316 ANTIOCH/NASHVILLE-A
9027 235 1317 EL PASO - A
9025 233 1318 BAKERSFIELD - A
9020 252 1321 PEORIA - A
9023 288 1323 MIDDLETOWN - A
9028 239 1325 CHARLESTON/NORTHWOODS-A
9027 258 1327 BAYTOWN - A
9020 249 1328 LAS VEGAS(BLVD)-A
9027 236 1330 EVANSVILLE - A
9023 283 1333 POUGHKEEPSIE - A
9022 273 1334 PITTSBURGH-SOUTH HILLS -
9028 274 1335 GREENSBORO - A
9027 258 1336 LAKE ▇▇▇▇▇▇▇ - A
9027 257 1337 PLANO - A
51
9025 251 1338 TUCSON - A
9023 285 1343 CAMBRIDGE - A
9022 273 1344 PITTSBURGH-PENN CENTER -
9028 277 1345 HIALEAH - A
9027 263 1347 LAFAYETTE - A
9022 271 1350 MENTOR - A
9022 272 1353 DE ▇▇▇▇/SYRACUSE - A
9023 287 1354 WILLOW GROVE-A
9028 276 1355 ALTAMONTE SPG - A
9025 247 1358 CHULA VISTA - A
9023 286 1364 LAKE GROVE - A
9028 277 1365 MIAMI/▇▇▇▇▇▇ RDG - A
9027 234 1367 WACO - A
9025 246 1368 CONCORD - A
9022 267 1370 COLUMBUS-EASTLAND-A
9023 280 1374 BEL AIR -A
9028 274 1375 WINSTON SALEM - A
9027 258 1377 HOUSTON WILLOWBROOK - A
9025 248 1378 ORANGE - A
9022 260 1380 CHICAGO-IRVING PARK-A
9028 270 1385 ATLANTA - A
9027 236 1386 GOODLETTSVILLE/NASHVILLE-
9027 235 1387 AMARILLO - A
9025 248 1388 COSTA MESA - A
9022 231 1390 ▇▇▇ ARBOR-A
9028 268 1395 KNOXVILLE WEST TOWN-A
9027 235 1397 ODESSA - A
9025 247 1398 SAN BERNARDINO - A
9020 254 1401 WICHITA - A
9023 285 1403 NATICK - A
9023 286 1404 MASSAPEQUA - A
9028 238 1405 FAYETTEVILLE - A
9027 258 1407 BEAUMONT - A
9025 245 1408 SACRAMENTO-FLORIN - A
9022 271 1410 CANTON - A
9023 288 1414 NANUET - A
9028 237 1415 CLEARWATER/COUNTRYSIDE-A
9027 258 1417 HUMBLE - A
9023 281 1424 BETHESDA - A
9027 256 1427 SAN ANTONIO- A
9022 271 1430 MIDDLEBURG HTS/CLEVELAND-
9023 288 1434 ▇▇▇▇▇- A
9028 270 1435 MACON - A
9027 234 1437 ARLINGTON/PARKS - A
52
9025 247 1438 EL CAJON - A
9023 289 1443 MANCHESTER - A
9023 286 1444 WHITE PLAINS - A
9028 282 1445 RICHMOND - A
9027 234 1447 FT WORTH - A
9022 265 1450 ROSEVILLE-A
9023 287 1454 BENSALEM/CORNWELLS HTS-A
9028 238 1455 WILMINGTON - A
9028 276 1456 OVIEDO - A
9027 258 1457 THE WOODLANDS - A
9022 265 1460 LIVONIA-A
9023 283 1463 BURLINGTON - A
9023 287 1464 DEPTFORD - A
9028 237 1465 TAMPA-UNIVERSITY - A
9025 246 1468 CUPERTINO - A
9022 266 1470 GREENWOOD-A
9023 290 1473 SELINSGROVE - A
9022 271 1474 ▇▇▇▇▇▇▇▇ - A
9028 238 1475 DURHAM - A
9025 246 1478 SAN BRUNO - A
9023 290 1484 READING - A
9028 275 1485 ORANGE PK/JACKSONVILLE-A
9027 256 1487 AUSTIN/LAKELINE - A
9025 246 1488 SAN ▇▇▇▇-▇▇▇▇▇▇▇▇▇ - A
9022 265 1490 ▇▇▇▇-A
9023 287 1494 MOORESTOWN - A
9028 237 1495 FT ▇▇▇▇▇ - A
9020 261 1500 ST ▇▇▇-A
9022 272 1504 WILLIAMSVILLE/BUFFALO-A
9025 240 1508 NORTHRIDGE - A
9022 294 1510 CALUMET CITY-A
9022 272 1514 NIAGARA FALLS - A
9028 274 1515 ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ - A
9025 248 1518 CERRITOS -A
9022 271 1520 AKRON-CHAPEL HILL - A
9022 272 1524 ROCHESTER-GREECE -A
9028 239 1525 COLUMBIA - A
9025 246 1528 SAN ▇▇▇▇▇▇ - A
9022 271 1530 RICHMOND HEIGHTS - A
9023 290 1534 SCRANTON - A
9028 277 1535 PLANTATION - A
9025 245 1538 CITRUS HTS-SUNRISE -A
9022 266 1540 INDIANAPOLIS-LAFAYETTE SQ
9023 286 1544 ▇▇▇▇ PARK - A
53
9028 239 1545 SPARTANBURG - A
9025 248 1548 LAGUNA HILLS - A
9023 287 1554 ▇▇▇▇ LANDING - A
9028 276 1555 ▇▇▇▇▇▇▇ - A
9020 249 1558 ▇▇▇▇▇▇ - A
9022 267 1560 DAYTON-DAYTON MALL-A
9022 271 1564 NILES - A
9028 270 1565 ▇▇▇▇▇▇(ATL/SOUTHLAKE) - A
9025 240 1568 ▇▇▇▇▇▇ - A
9022 260 1570 SCHAUMBURG - A
9023 288 1574 MIDDLETOWN - A
9028 282 1575 HAMPTON - A
9025 241 1578 AIEA OAHU-PEARL RIDGE - A
9022 293 1580 LEXINGTON-A
9022 272 1584 ▇▇▇▇▇▇ - A
9028 275 1585 TALLAHASSEE - A
9025 251 1588 PHOENIX-METRO CENTER - A
9022 265 1590 SAGINAW-A
9022 273 1594 MONACA - A
9028 239 1595 GREENVILLE - A
9025 248 1598 CITY OF INDUSTRY - A
9022 266 1600 INDIANAPOLIS-CASTLETON SQ
9023 281 1604 LANDOVER - A
9028 238 1605 RALEIGH - A
9025 248 1608 WESTMINSTER - A
9022 293 1610 CINCINNATI-NORTHGATE-A
9023 288 1614 ▇▇▇▇▇▇▇▇▇▇ - A
9028 282 1615 CHESAPEAKE/GREENBRIER-A
9025 245 1618 MODESTO - A
9022 260 1620 ▇▇▇▇▇▇ HILLS-A
9022 272 1623 CLAY (SYRACUSE) - A
9023 288 1624 STATEN ISLAND - A
9028 237 1625 SARASOTA - A
9025 251 1628 MESA - A
9020 261 1630 FLORISSANT-A
9023 280 1634 BALTIMORE-WEST - A
9028 275 1635 JACKSONVILLE - A
9025 248 1638 BREA - A
9020 261 1640 FAIRVIEW HTS-A
9020 254 1642 TOPEKA - A
9023 290 1644 LANCASTER - A
9028 277 1645 BOCA RATON - A
9028 274 1646 PINEVILLE - A
9025 247 1648 SAN DIEGO-NORTH - A
54
9022 294 1650 MERRILLVILLE-A
9023 287 1654 MEDIA - A
9028 277 1655 MIAMI - A
9025 246 1658 SANTA ▇▇▇▇ - A
9022 294 1660 AURORA-A
9023 288 1664 PARAMUS - A
9028 275 1665 GAINESVILLE - A
9020 249 1668 LAS VEGAS(▇▇▇▇▇▇▇)-A
9022 271 1670 AKRON-ROLLING ACRES - A
9028 268 1675 KNOXVILLE EAST TOWN-A
9025 247 1678 CARLSBAD - A
9022 266 1680 INDIANAPOLIS-WASHING SQ -
9023 288 1684 WOODBRIDGE - A
9028 270 1685 DULUTH - A
9025 233 1688 ▇▇▇▇▇▇▇ - A
9020 261 1690 CHESTERFIELD-A
9022 271 1694 ERIE - A
9028 270 1695 ALPHARETTA - A
9025 246 1698 NEWARK - A
9022 265 1700 DEARBORN-A
9028 277 1705 W PALM BEACH - A
9025 251 1708 PHOENIX-DESERT SKY - A
9020 249 1709 ▇▇▇▇▇▇▇▇▇ - A
9022 271 1710 NO OLMSTED - A
9020 252 1712 GRAND FORKS - A
9022 273 1714 GREENSBURG - A
9028 277 1715 MIAMI - A
9027 235 1717 ALBUQUERQUE - A
9020 249 1718 ▇▇▇▇▇ - A
9022 265 1720 STERLING HTS-A
9020 252 1722 BLOOMINGTON - A
9023 280 1725 ANNAPOLIS - A
9025 251 1728 TUCSON - A
9022 293 1730 ▇▇▇▇▇▇▇▇-A
9023 286 1733 YONKERS - A
9023 287 1734 LAWRENCEVILLE - A
9028 282 1735 NORFOLK - A
9025 241 1738 KANEOHE(SUR) - A
9022 294 1740 JOLIET-A
9023 288 1744 OCEAN - A
9028 237 1745 TAMPA - A
9025 248 1748 MONTCLAIR - A
9022 294 1750 ORLAND PARK-A
9023 281 1754 GAITHERSBURG - A
55
9028 277 1755 BOYNTON BEACH - A
9025 247 1758 ESCONDIDO - A
9022 265 1760 NOVI-A
9023 288 1764 ROCKAWAY - A
9028 277 1765 PALM BEACH GARDENS-A
9025 251 1768 PHOENIX/PARADISE VLY-A
9022 271 1770 NORTH ▇▇▇▇▇▇▇ - A
9023 280 1773 SALISBURY - A
9028 277 1775 PEMBROKE PINES - A
9020 252 1780 SPRINGFIELD-A
9022 272 1784 ▇▇▇▇▇▇▇ CITY - A
9025 246 1788 RICHMOND - A
9022 293 1790 LOUISVILLE-OKOLONA-A
9023 286 1794 EAST NORTHPORT - A
9025 251 1798 GLENDALE -A
9022 264 1800 MISHAWAKA-A
9022 232 1804 BARBOURSVILLE - A
9028 238 1805 RALEIGH - A
9022 293 1810 CINCINNATI - A
9023 281 1814 FAIRFAX - A
9022 260 1820 WEST DUNDEE-A
9022 273 1824 WEST MIFFLIN - A
9022 231 1830 FT ▇▇▇▇▇-A
9023 287 1834 NORTH WALES - A
9025 240 1838 BURBANK - A
9022 294 1840 CHICAGO RIDGE-A
9023 280 1844 COLUMBIA - A
9022 293 1850 LOUISVILLE-OXMOOR-A
9023 287 1853 WILMINGTON - A
9023 280 1854 PARKVILLE - A
9022 273 1863 JOHNSTOWN - A
9023 280 1864 COCKEYSVILLE - A
9025 247 1868 ▇▇▇▇▇▇ VLY - A
9023 287 1874 BURLINGTON - A
9023 287 1884 KING OF PRUSSIA - A
9022 272 1894 ROCHESTER - A
9028 278 1905 HATO REY - A
9028 278 1915 BAYAMON - A
9022 294 1921 ▇▇▇▇▇▇▇▇ - A
9023 286 1924 VALLEY STREAM - A
9028 278 1925 CAROLINA - A
9028 278 1935 MAYAGUEZ - A
9023 289 1944 YORKTOWN HEIGHTS - A
9028 278 1945 ▇▇▇▇▇ - A
56
9022 232 1954 CHARLESTON - A
9028 237 1955 LAKELAND - A
9025 246 1958 SAN ▇▇▇▇/OAK RIDGE - A
9028 282 1974 ROANOKE - A
9025 245 1978 RENO - A
9022 266 1980 LAFAYETTE - A
9022 272 1984 BUFFALO/HAMBURG - A
9028 274 1985 HIGH POINT - A
9025 248 1998 MONTEBELLO - A
9025 240 1999 SANTA CLARITA - A
9022 272 2003 ROCHESTER/IRONDEQUOIT-B
9022 272 2007 AUBURN - B
9022 267 2010 MANSFIELD-B
9022 271 2013 NEW CASTLE - B
9028 274 2017 GASTONIA - B
9022 231 2020 TOLEDO - B
9020 261 2021 ▇▇▇▇▇ - B
9020 291 2022 COUNCIL BLUFFS - B
9023 284 2023 CONCORD - B
9027 269 2025 DOTHAN - B
9027 263 2026 SLIDELL-B
9025 243 2027 WASILLA - B
9020 292 2029 UNION GAP - B
9020 259 2031 FOND DU LAC - B
9023 281 2034 BOWIE - B
9028 239 2035 COLUMBIA - B
9027 262 2036 ▇▇▇▇▇▇▇-A
9022 264 2040 BATTLE CREEK-B
9022 260 2041 ST ▇▇▇▇▇▇▇ - B
9023 285 2043 KINGSTON - B
9025 251 2047 SIERRA VISTA - B
9025 243 2049 ▇▇▇▇▇▇▇ - B
9022 231 2050 ▇▇▇▇▇▇▇-B
9020 291 2051 BELLEVUE-B
9028 268 2055 MORRISTOWN - B
9027 269 2056 ▇▇▇▇ ▇▇▇▇▇▇/FT ▇▇▇▇▇▇ BCH
9025 245 2059 ▇▇▇▇▇ - B
9022 267 2060 DAYTON-SALEM-B
9022 231 2061 DEFIANCE - B
9020 252 2062 FORSYTH - B
9028 282 2064 COLONIAL HTS - B
9028 275 2065 BRUNSWICK
9022 266 2070 COLUMBUS-B
9022 293 2071 CINCINNATI-WESTERN HILLS-
57
9023 285 2073 WOONSOCKET - B
9023 290 2074 STROUDSBURG - A
9027 257 2077 TYLER - B
9025 247 2078 YUMA - B
9020 252 2082 FARGO-B
9027 262 2086 COLUMBUS-B
9027 263 2087 ALEXANDRIA - B
9025 233 2088 SANTA ▇▇▇▇▇ - B
9022 267 2104 ST ▇▇▇▇▇▇▇▇▇▇▇ - B
9028 238 2105 BURLINGTON - B
9027 262 2106 TUPELO - B
9020 259 2112 GREEN BAY-B
9023 283 2113 ROTTERDAM(SCHENECTADY) -
9022 273 2114 WASHINGTON - B
9025 244 2119 SALEM(LANCASTER) - B
9020 252 2121 PERU - B
9020 252 2122 DUBUQUE - B
9022 273 2124 ▇▇▇▇▇▇ - B
9028 275 2125 VALDOSTA - B
9022 264 2130 ELKHART-B
9020 254 2131 SALINA - B
9022 272 2134 CHEEKTOWAGA/BUFFALO-B
9028 276 2135 SEBRING - B
9025 233 2138 SANTA ▇▇▇▇▇▇▇ - B
9022 266 2140 ▇▇▇▇▇▇▇▇-B
9028 237 2145 PORT CHARLOTTE - B
9020 261 2146 CAPE GIRARDEAU-B
9027 234 2147 IRVING
9025 241 2148 KAHULUI MAUI - B
9025 243 2149 BELLINGHAM - B
9020 252 2152 MINOT - B
9028 277 2155 MIAMI/▇▇▇▇▇▇▇ - B
9028 268 2156 MARYVILLE-B
9022 293 2160 CLARKSVILLE-B
9020 252 2161 CORALVILLE - B
9027 236 2166 HUNTSVILLE-B
9023 283 2173 SARATOGA - B
9028 238 2175 GREENVILLE
9020 261 2176 PADUCAH-B
9027 234 2177 WICHITA FALLS - B
9025 244 2179 MEDFORD - B
9022 264 2180 TRAVERSE CITY-B
9023 284 2183 SO PORTLAND - B
9027 269 2186 OXFORD - B
58
9020 291 2191 LINCOLN-B
9028 276 2195 TITUSVILLE - B
9027 263 2196 GAUTIER - B
9027 258 2197 TEXAS CITY - B
9020 259 2200 RACINE-B
9023 284 2203 BRUNSWICK - B
9027 236 2205 COOKEVILLE - B
9027 269 2206 FAIRFIELD - B
9020 252 2212 CEDAR RAPIDS-B
9028 277 2215 KEY WEST - B
9025 251 2218 PRESCOTT - B
9025 243 2219 LACEY/OLYMPIA - B
9020 249 2220 ST ▇▇▇▇▇▇ - B
9023 290 2224 CHAMBERSBURG - B
9027 236 2226 MURFREESBORO - B
9027 258 2227 LAKE ▇▇▇▇▇▇▇ - B
9020 259 2232 MADISON-EAST-B
9027 236 2236 DECATUR - B
9025 244 2239 VANCOUVER - B
9027 255 2241 FAYETTEVILLE - B
9020 292 2242 ▇▇▇▇▇▇▇▇ - B
9023 290 2244 HANOVER - B
9028 276 2245 MELBOURNE - B
9027 256 2247 LAREDO - B
9023 290 2254 LEBANON - B
9027 263 2256 BILOXI - B
9025 233 2258 SAN ▇▇▇▇ OBISPO - B
9020 292 2259 MISSOULA - B
9028 268 2265 ▇▇▇▇▇▇▇ CITY - B
9020 250 2271 FT ▇▇▇▇▇▇▇ - B
9020 259 2272 MILWAUKEE-GLENDALE-B
9023 285 2283 SWANSEA - B
9025 246 2288 ANTIOCH - B
9025 244 2289 ROSEBURG - B
9022 264 2290 MICHIGAN CITY-B
9023 284 2293 AUGUSTA - B
9025 233 2298 MERCED - B
9025 243 2299 ABERDEEN - B
9020 254 2301 KANSAS CITY-ANTIOCH-B
9027 269 2306 GADSDEN - B
9025 246 2308 SANTA ▇▇▇▇ - B
9025 243 2309 SILVERDALE - B
9028 276 2315 ▇▇▇▇▇▇ BEACH(STUART)-B
9027 236 2316 ▇▇▇▇▇▇▇▇-B
59
9025 240 2318 THOUSAND OAKS - B
9023 285 2323 HYANNIS-B
9020 292 2329 KENNEWICK(PASCO) - B
9025 243 2330 PUYALLUP - B
9020 261 2331 JEFFERSON CITY-B
9027 236 2335 CLARKSVILLE - B
9025 244 2339 SPRINGFIELD - B
9020 259 2342 KENOSHA-B
9023 283 2343 LANESBORO(PITTSFIELD)-B
9023 290 2344 STATE COLLEGE - B
9028 268 2345 CLEVELAND - B
9020 292 2349 COEUR D'ALENE - B
9020 252 2352 ST CLOUD-B
9023 283 2353 KINGSTON - B
9022 232 2354 VIENNA (PARKERSBURG) - B
9028 278 2355 HATILLO(ARECIBO) - B
9025 251 2358 FLAGSTAFF - B
9020 261 2360 QUINCY-B
9020 249 2361 GRAND JUNCTION - B
9020 250 2371 CHEYENNE - B
9020 259 2372 SHEBOYGAN-B
9023 285 2373 NO DARTMOUTH - B
9023 287 2374 VINELAND - B
9022 265 2380 BAY CITY - B
9027 255 2381 ▇▇▇▇▇▇ - B
9020 259 2382 MADISON-WEST - B
9025 241 2388 HILO(SUR) - B
9025 243 2389 BURLINGTON - B
9022 267 2390 SPRINGFIELD-B
9020 291 2392 DES MOINES-B
9023 281 2395 MANASSAS - A
9020 250 2398 LONGMONT - B
9020 252 2402 BISMARCK-B
9020 291 2412 RAPID CITY-B
9028 270 2415 CENTERVILLE - B
9022 267 2420 ▇▇▇▇▇▇-B
9020 291 2421 GRAND ISLAND-B
9020 291 2422 SIOUX CITY-B
9028 268 2425 BRISTOL - B
9020 254 2430 MANHATTAN - B
9020 259 2432 LA CROSSE-B
9028 282 2435 CHARLOTTESVILLE - B
9023 284 2443 MANCHESTER-B
9022 231 2450 LIMA-B
60
9023 283 2453 GLENS FALLS - B
9028 282 2454 CHESAPEAKE - B
9023 284 2463 LEWISTON - B
9020 259 2470 WAUSAU-B
9022 265 2482 PORT HURON - B
9023 287 2484 POTTSTOWN - B
9028 237 2485 BROOKSVILLE - B
9027 234 2487 KILLEEN - B
9022 273 2494 ALTOONA - B
9027 256 2497 BROWNSVILLE - B
9020 252 2500 DULUTH-B
9027 256 2507 MCALLEN - B
9022 231 2510 SANDUSKY-B
9028 274 2515 HICKORY -B
9027 234 2517 SAN ▇▇▇▇▇▇ -B
9023 288 2524 TOMS RIVER -B
9027 235 2527 LAS CRUCES -B
9023 283 2533 PLATTSBURGH - B
9027 256 2537 HARLINGEN - B
9022 271 2544 ▇▇▇▇▇▇ - B
9022 267 2550 ZANESVILLE-B
9028 237 2555 CRYSTAL RIVER - B
9027 257 2557 LONGVIEW - B
9028 237 2565 BRADENTON - B
9022 266 2570 MUNCIE-B
9023 284 2583 BANGOR - B
9027 234 2587 ▇▇▇▇▇▇ - B
9023 288 2593 NEWBURGH - B
9027 269 2595 AUBURN - B
9022 266 2600 TERRE HAUTE-B
9020 252 2602 ROCHESTER - B
9023 283 2603 NEW HARTFORD - B
9023 290 2604 ▇▇▇▇▇▇ BARRE - B
9022 232 2614 UNIONTOWN - B
9028 268 2615 ▇▇▇▇▇▇ - B
9023 283 2623 RUTLAND - B
9023 290 2624 CAMP HILL - B
9028 238 2635 ROCKY MOUNT - B
9027 258 2637 PORT ▇▇▇▇▇▇ - B
9022 265 2642 MIDLAND - B
9023 290 2644 ▇▇▇▇▇ - B
9023 280 2654 DOVER - B
9027 235 2657 MIDLAND - B
9023 284 2663 NEWINGTON/PORTSMOUTH-B
61
9023 280 2664 ▇▇▇▇▇▇▇▇▇ - B
9022 273 2674 INDIANA - B
9028 278 2675 GUAYAMA - B
9027 257 2677 BOSSIER CITY
9022 272 2683 WATERTOWN - B
9023 290 2684 FRACKVILLE - B
9023 281 2694 FREDERICKSBURG - B
9028 237 2695 NAPLES - B
9027 263 2696 HOUMA - B
9022 232 2704 MT HOPE/▇▇▇▇▇▇▇ - B
9028 239 2705 ▇▇▇▇▇▇▇▇ - B
9022 266 2710 KOKOMO-B
9020 254 2712 ST ▇▇▇▇▇▇ - B
9022 232 2714 BLUEFIELD - B
9022 273 2724 ▇▇▇▇▇▇ - B
9022 273 2734 CRANBERRY-B
9022 272 2744 HORSEHEADS/ELMIRA - B
9028 276 2745 LEESBURG - A
9028 238 2755 JACKSONVILLE - B
9020 252 2760 ▇▇▇▇▇▇▇▇▇-B
9023 286 2764 BRONX-FORDHAM RD
9023 280 2774 CUMBERLAND - B
9028 239 2785 MYRTLE BEACH - B
9022 231 2790 FINDLAY-B
9027 269 2796 TUSCALOOSA - B
9022 267 2800 RICHMOND - B
9022 294 2802 BOURBONNAIS/▇▇▇▇▇▇▇ - B
9027 269 2805 PANAMA CITY - B
9027 262 2806 MEMPHIS/HICKORY - B
9020 292 2808 GREAT FALLS - B
9023 280 2814 MARTINSBURG - B
9028 275 2815 ALBANY - B
9028 268 2825 KINGSPORT - B
9022 232 2826 BRIDGEPORT/CLARKSBRG - B
9028 282 2835 LYNCHBURG-RIVER RDG MALL-
9020 252 2840 BLOOMINGTON-B
9028 274 2844 SHELBY - B
9028 270 2845 ATHENS - B
9022 267 2850 CHILLICOTHE-B
9028 239 2855 CHARLESTON - B
9028 270 2865 UNION CITY - B
9020 291 2872 SIOUX FALLS - B
9028 237 2885 PORT ▇▇▇▇▇▇ - B
9020 252 2920 CHAMPAIGN-B
62
9020 261 2922 ▇▇▇▇▇▇ - B
9022 271 2932 ASHTABULA - B
9023 286 2933 NEW HYDE PARK-INTCPT - B
9023 285 2934 TAUNTON - B
9028 274 2935 STATESVILLE - B
9022 293 2940 FRANKLIN-B
9023 280 2945 HAGERSTOWN - B
9027 236 2950 OWENSBORO-B
9022 264 2960 ▇▇▇▇▇▇ HARBOR-B
9023 280 2963 WESTMINSTER - B
9028 238 2965 ▇▇▇▇▇▇ - B
9022 294 2980 CHICAGO/FORD CITY-B
9022 260 2990 ROCKFORD-CHERRYVALE-B
63
SCHEDULE 3.3A
LICENSEE MARKS
Licensee claims ownership rights in the following trademarks and/or service
marks:
▇▇▇▇
64
SCHEDULE 3.3B
SEARS MARKS
Sears claims ownership rights in the following trademarks and/or service marks:
▇▇▇▇
▇▇▇▇▇(R)
Sears Card(R)
Sears Premier Card(R)
Sears Gold MasterCard(R)
Sears Premier Gold MasterCard(R)
The Great Indoors Gold MasterCard(R)
65
SCHEDULE 4.1
SEARS FEES
1. Sears Fees. The Sears Fees shall be calculated as follows:
a. Standard Fees for Tax Preparation and Electronic Filing 19.2% of Net Sales
b. Fees for Tax Preparation and Electronic Filing in Test Markets identified
on Schedule 4.1(a). The applicable percentage of Net Sales set forth in
this subsection (b) is calculated on a per store basis.
19.6% of Net Sales if the number of paid Tax Returns completed
during the Tax Season is greater than 104% of the number of Tax Returns
completed during the immediately preceding Tax Season;
19.4% of Net Sales if the number of paid Tax Returns completed
during the Tax Season is greater than 102%, but less than or equal to
104%, of the number of Tax Returns completed during the immediately
preceding Tax Season;
19.2 % of Net Sales if the number of paid Tax Returns completed
during the Tax Season is greater than 98%, but less than or equal to 102%,
of the number of Tax Returns completed during the immediately preceding
Tax Season;
19% of Net Sales if the number of paid Tax Returns completed during
the Tax Season is greater than 96%, but less than or equal to 98% of the
number of Tax Returns completed during the immediately preceding Tax
Season;
18.8% of Net Sales if the number of paid Tax Returns completed
during the Tax Season is less than or equal to 96% of the number of Tax
Returns completed during the immediately preceding Tax Season
By way of example, if the number of paid Tax Returns during the 2004 Tax
Season at a particular Store is 500, and the number of paid Tax Returns
during the 2003 Tax Season at the same store was 511, then the 2004 number
is 97.847 percent of the 2003 number and the applicable percentage of Net
Sales would be 19% pursuant to the above schedule.
If, however, the number of paid Tax Returns during the 2004 Tax Season at
that store is 530, and the number for the 2003 Tax Season was 511, then
the 2004 number is 103.718 percent of the number of 2003 and the
applicable percentage of Net Sales would be 19.4 percent pursuant to the
above schedule.
c. Small Store Sears Fees - A "Small Store" is defined as a store with less
than $15,000,000 in annual revenue and fees shall be as follows:
66
9% of Net Sales for all products
13% of Net Sales after the first year of sales above $15,000,000
Standard Fees as set forth in Section 1a above thereafter
d. New Store (not a replacement store location)
9% of Net Sales for the first twelve months of operation
After the first twelve months, Small Store Sears Fees apply
e. Tax Classes - Fees for Tax Classes shall be based upon a seven dollar
($7.00) per square foot annual cost, prorated for the time that Licensee
occupies such space.
2. Assumed Commission.
In the event that Licensee fails to meet the store minimum requirement set
forth in Section 6.1 of the Agreement, Licensee shall pay an assumed
commission on the number of stores required to reach the Designated Sears
Store minimum. The Assumed Commission will equal the average Sears Fees of
the bottom quartile Designated Sears Stores from the previous year.
3. Financial Services.
In complete satisfaction of any obligation to pay fees to Sears based upon
sales by Licensee of financial services products to Customers as defined
in Section 4.1, during each Tax Season, Licensee shall pay Sears, at the
conclusion of each Tax Season, the greater of either (i) Fifteen Percent
of the Net Sales to U.S. tax operations, or (ii) the amount of Fifty
Thousand Dollars ($50,000).
4. Check Cashing
Sears shall receive 85% of the Check Cashing Fee
Licensee shall receive 15% of the Check Cashing Fee
5. Peace of Mind Program.
Licensee shall pay a fee of 15% of Net Sales to Sears for the Peace of
Mind Program.
6. Other Services.
Sears Fees for Other Services shall be agreed to annually by the parties.
7. Interchange Fee.
The Sears Fees set forth above shall include an Interchange Fee of at
least one percent (1%) for the processing of the Sears Cards. Such
Interchange Fee may be changed at Sears' sole discretion, but shall not
increase the Sears Fees set forth herein unless otherwise agreed by the
parties.
67
SCHEDULE 4.1(a)
TEST MARKETS
To be determined by the parties.
68
SCHEDULE 6.1(a)
FACILITY SPECIFICATIONS
1. See attached "Office Layout Guidelines" that show the general layout and
space requirements of average Sears office locations.
2. The size of a tax service office shall be calculated as follows:
a. One work station per 300 returns produced.
▇. ▇▇▇▇▇ shall use reasonable efforts to provide 125 square feet of
space per work station (this includes space for storage and
reception).
3. Sears shall provide routine janitorial services in the Licensed Business
Area consistent with the janitorial services regularly performed in the
Designated Sears Store.
4. Licensee may update and revise these specifications from time to time as
necessary, but such changes must be agreed and approved in writing by
Sears.
69
SCHEDULE 6.1(f)
HVAC
Appropriate heating, ventilation and air conditioning to Licensee's offices.
Reasonable office temperatures of between 64 degreesF and 78 degreesF shall be
maintained on average during normal business hours, except during circumstances
beyond Sears' reasonable control, including but not limited to power outages,
▇▇▇▇▇-outs and extreme weather circumstances.
70
SCHEDULE 6.2
CONSTRUCTION/REMODEL COSTS
LICENSED BUSINESS AREA AT DESIGNATED SEARS STORE
Sears shall be responsible for the following in the construction of a Licensed
Business Area, including Additional Locations, at a Designated Sears Store:
a. if required by Sears, perimeter walls, painted standard Sears
colors;
b. floor covered with standard Sears carpet/tile;
c. ceiling containing standard Sears lighting; and
d. standard electrical outlets.
Licensee shall be responsible for all other costs and expenses, including,
without limitation furniture, fixtures, equipment, displays, cabinets, counters,
shelving, and other such items. Licensee shall also be responsible for any
non-standard walls, wall coverings, floor coverings, ceilings, lighting and
electrical within the Licensed Business Area.
EXPIRED, TERMINATED, VACATED OR ABANDONED LICENSED BUSINESS AREA
If a Licensed Business Area expires or is terminated, vacated or abandoned,
Licensee shall have the financial responsibility to remove all Licensee's
Equipment, signs and non-permanent fixtures. Licensee shall cap all gas,
electrical and plumbing lines and disconnect all telephones. The Licensed
Business Area shall be vacated in a "broom-clean" condition.
71
SCHEDULE 9.2
CREDIT CARD CONDITIONS
Licensee's acceptance and processing of the Credit Cards (as defined in the
Agreement) shall be performed in accordance with the following:
1. Acceptance of Credit Cards. Licensee shall accept each Credit Card
presented by a Cardholder as payment for Authorized Merchandise/Services,
and Sears shall reimburse Licensee for the amount of such Credit Card Sale
in accordance with the terms of this Schedule, provided that Licensee
complies with all of the other procedures in the Agreement and this
Schedule relating to the acceptance of Credit Cards each time it makes a
Credit Card Sale (as defined in the Agreement), including but not limited
to the following conditions:
(a) The Credit Card is presented to Licensee on or before the expiration
date, if any;
(b) The Credit Card is used as payment for Authorized Merchandise/
Services purchased by a Cardholder;
(c) Licensee has followed the procedures for the completion of Sales
Slips as set forth in Paragraph 2 below; and
(d) Licensee has obtained Authorization for the Credit Card Sale as
required pursuant to Paragraph 3 below.
For purposes of this Schedule, "Sales Slips" means evidence of a Credit
Card Sale in paper, electronic or imaged form, as designated by Sears to
Licensee, and "Authorization" means permission from the Issuer or its
agent to make a Credit Card Sale.
2. Completion of Sales Slips.
(a) General Requirements. For each Credit Card Sale, Licensee shall
prepare a Sales Slip using the form approved by Sears, which may be
modified from time to time by Sears in its sole discretion. Each
Sales Slip must be legible and fully completed with the following
information:
(i) Date and location of the Credit Card Sale, including the unit
number assigned by Sears for the Licensed Business location;
(ii) Brief description of the Authorized Merchandise/Services;
(iii) Total amount of the Credit Card Sale, including itemized
purchases, any additional fees and credits, and applicable
state and local taxes;
(iv) Credit Card account number; and
72
(v) Authorization number or code (where applicable).
In the event Licensee obtains Authorization (as defined in Paragraph
3 below) for each Credit Card Sale through the POS Terminal,
Licensee shall not be required to obtain an imprint of the Credit
Card. Licensee shall include all Authorized Merchandise/Services
purchased in a single transaction on one Sales Slip except for
customer deposits or partial payments. Licensee shall not increase
the price of Authorized Merchandise/Services or charge an additional
fee to Cardholders for using a Credit Card for purchasing Authorized
Merchandise/Services.
(b) Cardholder's Signature. Except in the case of internet, telephone or
mail orders, a Sales Slip must be signed by the Cardholder for each
Credit Card Sale at the time the Credit Card Sale is made and in the
presence of an authorized representative or employee of Licensee.
The signature on the Sales Slip must be reasonably similar to the
signature appearing on the signature panel of the Credit Card. After
completion of the Credit Card Sale, Licensee shall provide a legible
and completed copy of the Sales Slip to the Cardholder. If Licensee
fails to obtain the signature of the Cardholder on the Sales Slip
and the Cardholder has not authorized the Credit Card Sale or denies
the validity of the Credit Card Sale, the Credit Card Sale shall be
subject to Chargeback pursuant to Paragraph 6 below. If the Credit
Card has not been signed, Licensee shall ask the Cardholder to sign
the Credit Card and verify such signature with the Cardholder's
driver's license or other government issued identification before
completion of the Credit Card Sale.
(c) Loss and Retention of Sales Slips. Licensee shall be responsible for
the loss, damage or corruption of any Sales Slips. Licensee shall
retain copies of all Sales Slips for at least three (3) years after
the date of the Credit Card Sales to which they apply. Licensee
shall provide copies of Sales Slips to Sears or the Cardholder
within five (5) days of a request from either party. Licensee's
failure to provide a requested Sales Slip shall subject Licensee to
Chargeback pursuant to Paragraph 6 below.
(d) Telephone and Mail Order Sales. In addition to each of the
requirements set forth in Paragraph 2(a) above, for internet,
telephone and mail order sales, Licensee must record the shipping
address and shipping date, if known, at the time of the Credit Card
Sale, on the Sales Slip. Licensee will use reasonable judgment in
identifying its customers. Licensee agrees to ship merchandise or
deliver services within the time required by applicable law, and
Licensee is responsible for compliance with all such applicable
laws. The Cardholder's signature is not required with respect to
mail order, telephone order or internet order Credit Card Sales,
provided an Authorization number has been given and recorded and
Licensee identifies each such Credit Card Sale as "Mail Order",
"Telephone Order" or "Internet Order" on the Sales Slip. If a
Cardholder asserts that he/she had not authorized a mail order,
telephone order or internet order Credit Card Sale, asserts that
he/she did not receive the merchandise within the time required
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by law, or otherwise denies the validity of the Credit Card Sale,
such Credit Card Sale shall be subject to Chargeback pursuant to
Paragraph 6 below.
3. Authorization.
(a) General Requirements. In accordance with the terms of this Paragraph
3, Licensee shall obtain Authorization for each proposed Credit Card
Sale. For purposes of this Schedule, the purchase of one or more
Authorized Merchandise/Services made by a Cardholder at one Licensed
Business location and at one time shall be deemed to constitute a
single Credit Card Sale.
(b) Obtaining Authorization.
(i) Electronic Locations. Licensee will obtain Authorization for
Credit Card Sales through the POS Terminal (if Licensee is
using a POS Terminal provided by Sears). If a referral code is
displayed on the POS Terminal and the dollar amount of the
Credit Card Sale ("Proposed Purchase Amount") is above a
dollar limit established for such Credit Card Sale ("Floor
Limit") at the Designated Sears Store, Licensee shall
telephone the Issuer to obtain further instructions, using a
telephone number provided by Sears for such purpose. Licensee
shall not process any Credit Card Sale in which the Proposed
Purchase Amount exceeds the Floor Limit without obtaining the
prior approval and consent of the Issuer.
(ii) Non-Electronic Authorization. When the POS Terminal is unable
to obtain Authorization electronically, Licensee shall contact
the Issuer of the Credit Card (or its agent) (the
"Authorization Center") using the telephone number provided
for such purpose by Sears. If the Authorization Center
approves the Credit Card Sale, Licensee will be given an
Authorization code or number which must be recorded on the
Sales Slip.
(c) Right of Chargeback. If Authorization for any Credit Card Sale is
required but not obtained by Licensee, or an Authorization code is
not recorded when Licensee is required to do so, or Authorization is
requested by Licensee but declined by the Issuer, Sears may process
a Chargeback for such Credit Card Sale pursuant to Paragraph 6
below.
(d) Card Retrieval and Retention. Licensee shall follow reasonable
instructions given by the Authorization Center in connection with a
Credit Card Sale, such as obtaining Cardholder identification or
Credit Card retention. If the Authorization Center instructs
Licensee to take the Credit Card and the Cardholder refuses,
Licensee will make no further effort to obtain the Credit Card.
4. Operating Standards. Licensee shall observe other operating standards
established by each Issuer from time to time ("Operating Standards") with
respect to the Credit Card
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Sales made by Licensee on such Issuer's Credit Card. A copy of the current
Sears Card Operating Standards is attached to this Schedule as Attachment
1.
5. Cardholder Credits and Payments. When merchandise or services originally
purchased with a Credit Card are returned for refund, unless specifically
required by law, Licensee shall not give cash refunds for Authorized
Merchandise/Services returned or rejected by a Cardholder to any
Cardholder in connection with a Credit Card Sale. For each non-cash refund
issued by Licensee to a Cardholder of all or a portion of a Credit Card
Sale (a "Credit"), Licensee shall prepare and deliver to the Cardholder
evidence of each Credit in a paper form (a "Credit Slip"), which Licensee
shall complete in accordance with the instructions provided by Sears from
time to time. Licensee will retain copies of all Credit Slips for three
(3) years from the date of the refund and will submit Credit Slips
evidencing such Credits to Sears within the time period required by law in
order that the appropriate Credit may be entered on the Cardholder's
account. The Credit indicated on the Credit Slip may not exceed the
original Credit Card Sale amount.
6. Chargeback Rights and Procedures. If Licensee has not complied with any of
the terms of this Schedule or the Agreement with respect to any Credit
Card Sale, Sears may process a Chargeback to Licensee for the amount of
the Credit Card Sale, including without limitation each Credit Card Sale
made on any Credit Card account with respect to which Licensee did not
properly process the Credit Card Sale or any portion thereof. A
"Chargeback" means Sears' refusal, under the terms of this Schedule, to
pay Licensee pursuant to the terms of the Agreement, and reimbursement to
Sears of a Credit Card Sale for which Licensee was previously paid. Sears
is not required to pay Licensee for a Credit Card Sale that is being
charged back. If Sears has already paid Licensee for such Credit Card
Sale, Sears in its sole discretion may deduct the amount to be charged
back through its settlement with Licensee under Section 9.4 of the
Agreement or offset such amount from future payments due Licensee under
the Agreement. Any Chargebacks not paid by the aforesaid means shall be
due and payable by Licensee promptly upon demand. Notwithstanding anything
to the contrary herein, in the event a Cardholder, in accordance with the
provisions of applicable state law or the federal Truth in Lending Act and
its implementing Regulation, Regulation Z, as they may be amended from
time to time, files with an Issuer or Sears a billing error notice,
unauthorized charge inquiry or alleges a quality dispute with respect to
merchandise or services purchased from Licensee, Sears has the right of
Chargeback against Licensee with respect to each Credit Card Sale which is
the subject of such inquiry or dispute. Licensee shall cooperate with the
Issuer in any investigation relating to any such inquiry or dispute, and
Licensee shall respond fully and accurately to the Issuer's requests for
information, documents or other assistance relating to any such
investigation immediately, and no later than twenty (20) days after
receipt. If any Issuer charges Sears a fee for excessive Chargebacks
against transactions of the Licensed Business, Licensee shall reimburse
Sears for the amount of such fee within five (5) days after receiving
Sears' invoice for such fee accompanied by reasonable supporting
documentation.
7. Representations and Warranties. Licensee represents and warrants to Sears
that each Credit Card Sale will arise out of a bona fide sale of
Authorized Merchandise/Services by
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Licensee and will not involve the use of a Credit Card for any other
purpose. Licensee will indemnify Sears for Licensee's use of a Credit Card
outside the scope of the Agreement or for unauthorized purposes.
8. Credit Policies and Account Terms. Licensee acknowledges that each Issuer
has the sole and exclusive right to set credit policies and account terms
and conditions, including but not limited to finance charge rates, fees
and other terms of the account agreement, for its Credit Card accounts and
that such policies, terms and conditions are beyond Sears' control. Sears
will use its best efforts to give Licensee prior notice of any changes in
credit policies or account terms that are reasonably likely to have a
material impact on Licensee's Credit Card Sales or to otherwise materially
affect Licensee's obligations under the Agreement.
9. Termination of Card Acceptance. Licensee acknowledges that Sears may, in
its sole discretion and upon notice to Licensee, terminate the acceptance
of the Credit Card at any Licensed Business location for good cause,
including high fraudulent activity, excessive Chargebacks or other course
of business conduct at such location that is injurious to the business
relationship between Licensee and Sears.
10. Defined Terms. Capitalized terms not otherwise expressly defined in this
Schedule have the meanings ascribed to them in the Agreement.
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ATTACHMENT 1 TO SCHEDULE 9.2
OPERATING INSTRUCTIONS
Sears Card Logo
Licensee shall properly display the appropriate Sears Card logos ("Logos") on
promotional materials to inform the public that the Sears Card will be honored
at the Licensed Business. Use of decals, signs, printed materials and broadcast
materials which bear the Logos must comply with the specifications provided to
Licensee. Licensee may use the Logos, or the names or representations thereof,
on promotional printed or broadcast materials only to indicate that the Sears
Card is accepted for payment.
Altered and Counterfeit Cards (Licensees With Store-based Operations)
Licensee's employees should be familiar with the appearance of a valid Sears
Card and must check cards presented for signs of counterfeiting or alterations.
Licensee's employees should exercise reasonable care in checking each Sears
Card.
Preparation of Sales Slip and Credit Slip
When imprinting is required, Licensee will use a suitable imprinter to legibly
imprint on each Sales Slip and Credit Slip the embossed information from the
Sears Card and from the Licensed Business plate and will fully complete the
Sales Slip or Credit Slip.
Licensee shall provide the Cardholder with a completed copy of the Sales Slip or
Credit Slip, as applicable, at the time of each completed Sears Card Sale.
Licensee will include the following information on the Cardholder's copy of the
Sales Slip or Credit Slip:
1. Cardholder's Account Number;
2. Licensed Business name, merchant number and address;
3. Itemized description of merchandise or service purchased;
4. Itemized charges and total amount of the Sears Card sale (including sales
tax);
5. Sears Card sale date;
6. Authorization number or code, where applicable; and
7. For Credits, original sale date and reason for refund, if applicable.
Authorization Requirements
Sears will provide Authorization services to Licensed Business locations within
the United States and its territories through authorization center
("Authorization Center(s)"). The Authorization
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Centers will be open for business seven (7) days per week, in conjunction with
Sears' retail store hours.
Licensee must obtain Authorization from the Authorization Center on all Sears
Card sales except as otherwise required in these Operating Instructions.
To obtain Authorization of a sales transaction, Licensee must provide Sears
with:
1. The Cardholder's Account number;
2. The Licensed Business Account number, if applicable; and
3. The total amount of the transaction (including sales tax and/or tip).
The Authorization code must be entered in the appropriate box on the Sales Slip
or shown on the automatically printed register receipt. Sears Card
Authorizations are valid for forty-five (45) days.
Authorization Floor Limit
In addition to any Floor Limits on Schedule 9.2, help desks will assign maximum
Floor Limits for Licensee when the Authorization system is not available. If
Licensee accepts a Sears Card sale at or above a Floor Limit without
Authorization, Licensee does so at its own risk, subject to Chargeback. Licensee
should not construe the assigned Floor Limits as a guarantee against potential
Chargeback. Any infraction of the Floor Limit policy shall be for the total
dollar amount of the transaction and not only the portion over the assigned
Floor Limit.
Request for Cancellation of Authorization
If Licensee or a Cardholder cancels or voids a sale transaction prior to its
completion and an Authorization was previously obtained for such Sears Card
sale, Licensee should request a cancellation of such Authorization, if requested
by Cardholder, which Licensee shall complete in accordance with the instructions
provided by Sears from time to time. An Authorization should be canceled on the
day it was made.
Remittance of Sales Slips and Credit Slips
Licensee shall electronically submit daily sales data to Sears or its designee.
Sales Slips and Credit Slips will show Cardholder Account number, name, address,
city, state, and may include other information reasonably related to customer
identification.
Chargeback Reason Codes - Immediate
Transactions violating the rules and instructions as established in these
"Operating Instructions" are subject to immediate Chargeback for the following
reasons:
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Definition Explanation
---------- -----------
Declined Authorization A purchase was completed after Licensee received a declined message
from the Authorization Center.
Invalid Card number Transaction was submitted using an account number for which no valid
account exists or can be located.
Non-Receipt of Sales Slip not provided in response to ticket retrieval
Requested Item request.
Requested Item- Sales Slip provided in response to ticket retrieval is not
Illegible Copy legible.
Service Establishment Used in situations where Licensee has violated general
Adjustment operating procedures not covered by other definitions. A detailed
explanation will be provided for Licensee.
Chargeback Reason Codes - Prior Notification
A pending Chargeback notification will be provided to Licensee in the following
cases. Licensee will have fifteen (15) business days to resolve the
inquiry/dispute to avoid the Chargeback. If the inquiry/dispute is not resolved
by Licensee within fifteen (15) business days, or Licensee has not notified the
Authorization Center of the resolution by the end of the fifteenth (15th)
business day, then Sears, at its option, may process a Chargeback to Licensee.
Definition Explanation
---------- -----------
Transaction Exceeds Any transaction at or above Licensee's assigned Floor Limit
Floor Limit for which a required Authorization was not obtained and which cannot,
for whatever reason, be promptly collected from the Cardholder.
Cardholder Disputes This Chargeback reason will be used for any Cardholder dispute.
Merchandise/Service Regarding the quality of merchandise purchased or services rendered
or any portion thereof.
Non-Receipt of Merchandise Cardholder charged for merchandise or services never received or
canceled prior to receipt.
Alteration of Amount This reason will apply only to Cardholder disputes claiming that the
purchase amount for which the Cardholder signed was altered after the
Cardholder signed the Sales Slip and without his/her consent or
direction. Upon presentation of adequate proof of such claim, such
as a Sales Slip, only the difference can be charged back.
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Duplicate Processing Cardholder has been charged more than one time for a single
transaction.
Non-Receipt of Credit Cardholder claims that a Credit issued by Licensee was never posted
to the Cardholder Account. The Chargeback is limited to the amount
of the Credit.
Credit Posted as Debit Cardholder possesses Credit Slip which appears as debit on his/her
statement.
Unauthorized Purchase The Cardholder claims that neither the Cardholder nor any party
authorized by the Cardholder participated in the transaction and that
the Cardholder has no knowledge of it.
Missing Signature Sales slip is missing signature or Licensee failed to follow
telephone Authorization procedure and Cardholder does not recognize
sale.
Licensee is expected to resolve a Cardholder dispute/inquiry directly with the
Cardholder. Sears will not arbitrate the dispute.
Merchant Program Agreement
In addition to the Chargebacks identified above, Sears may Chargeback any Sears
Card sale with respect to which Licensee fails to comply with the terms and
conditions set forth in the License Agreement.
Reversal of Chargebacks/Representment
Licensee will have ninety (90) days from Chargeback to cure the reason for
Chargeback and request a reversal from Sears. Sears, exercising its reasonable
judgment, shall decide whether any Chargeback is to be reversed. If Sears
decides to reverse a Chargeback, Licensee will submit to Sears:
1) The original Sales Slip or equivalent information in electronic or optic
format; and, where applicable,
2) Documentation of the Cardholder's agreement to the reversal.
Unless agreed to by Sears, Licensee may not resubmit any Sales Slip once that
item has been charged back for any reason. Nor may Licensee resubmit the amount
in question by preparing a new Sales Slip, unless that Sales Slip bears the
imprint to the Cardholder's Sears Card and is signed by the Cardholder.
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Good Faith Chargeback Reversals
If the ninety (90) day reversal period has elapsed, Licensee may request a good
faith reversal if extreme extenuating circumstances exist. Sears, using its
reasonable judgment, shall be sole determiner in granting any good faith
reversals. If a good faith reversal is granted, the transaction will be posted
to the Cardholder's Account. If the Cardholder objects for any reason, the
amount will immediately be charged back to Licensee with no further reversal
rights.
Sears Card Payments at Designated Locations
1) Licensee shall accept Sears Card payments at all Licensed Business
locations that have the technical capability to do so (if Licensee is
using a POS Terminal provided by Sears). Licensee shall accept such
payments at no charge or fee to Sears Cardholders.
2) Licensee shall ring each Sears Card payment through the POS Terminal and
record the payment data at the time of receipt of the payment.
3) Licensee must provide a receipt to Sears Cardholder for each payment,
regardless of whether the payment is by check or cash if requested by the
Cardholder.
4) In the event that any Sears Cardholder payment does not post or is
received in an incorrect amount, due to an error in ringing the payment or
a systems malfunction by Licensee or at the Licensed Business, Licensee
shall re-ring the payment, upon request by Sears and the Issuer's
verification that the payment did not post.
5) Licensee agrees to use reasonable efforts to assist Sears in researching
any Cardholder inquiries regarding payments. In the event Licensee does
not respond to Sears' inquiry within thirty (30) business days or is
unable to provide sufficient documentation within such time, the amount of
the payment in dispute will be subject to Chargeback pursuant to the
Agreement.
6) All checks for payments on a Cardholder's Sears Card account shall be made
payable to "Sears" or "Sears, ▇▇▇▇▇▇▇ and Co." and not to Licensee.
7) Licensee agrees to follow all laws, regulations and reporting requirements
applicable to taking any cash payments of ten thousand dollars ($10,000)
or more.
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